I know selling is a taxable event but I'm unsure about the intricacies of taking out only the seed money. I live in the U.S.
For example, let's say I bought $100 of Bitcoin less than a year ago and now the balance grew to $150. If I sell $100 now to take out the seed money (and keep $50 profit in there running), do I have to pay the short-term capital gains tax on that $100? Because technically, I've made no profit since I'm taking out only what I've put in.
How does the IRS consider a scenario like this? Would this be subject to regular income tax or would nothing happen since I'm taking out money that's the same amount as the money I've put in?
Any advice & insight is much appreciated. Thank you! (I know all about HODL and will HODL with the profits so please no bitcoin maxi comments pls. I need the seed money to cover important bills.)
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