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Author: Admin | 2025-04-28
1 BTC for $6,000 USD and then later sell that 1 BTC for $10,000. You’ve made a profit, or capital gain, of $4,000. If your country is one of the many that taxes capital gains, you will have to pay a capital gains tax on the $4,000 capital gain. Tax Rates: Short & Long-Term Gains The rates at which you pay capital gain taxes depend your country’s tax laws. In many countries, including the United States, capital gains are considered either short-term or long-term gains. The distinction between the two is simple to understand: long-term gains are gains that are realized on assets that are held for more than 1 year. Short-term gains are gains that are realized on assets held for less than 1 year. Taxable Events A taxable event refers to any type of crypto-currency transaction that results in a capital gain (or profit). Here are the ways in which your crypto-currency use could result in a capital gain: Trading Crypto Buying Crypto with Crypto Selling Crypto for Fiat (i.e., USD or CAD) Buying items or paying for services rendered with Crypto The taxation of crypto-currency contains many nuances - there are variations of the aforementioned events that could also result in a taxable event occurring (i.e., trading with coins acquired from a fork/split or buying something with crypto that you received for services rendered). Reporting Your Capital Gains As crypto-currency trading becomes more commonplace, tax authorities are clarifying regulations and cracking down on enforcement. Some exchanges, like Coinbase, are have already been ordered by the government to turn over trading data for specific customers. It’s important that you are reporting any occurrence of a taxable event, even if the taxable event resulted in a loss. Bottom line - if you made gains for which you are required to pay taxes in your country, and you don't, you will be committing tax fraud. Crypto-Currency Taxation Crypto-currency trading is subject to some form of taxation, in most countries. The term “trading” encompasses many different actions involving crypto-currency. These actions are referred to as Taxable Events. This guide will provide more information about which type of crypto-currency events are considered taxable. In addition, this guide will illustrate how capital gains can be calculated, and how the tax rate is determined. Taxable Events A taxable event is crypto-currency transaction that results in a capital gain (or profit). Here are the ways
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