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Author: Admin | 2025-04-28
As crypto capital gains tax, however, depends on whether you held your crypto assets for less than a year or over a year. This brings us to the two types of taxes in this category: Short-term and long-term capital gains tax (this part focuses on capital gains tax because crypto activities are currently primarily dominated by buying and selling). Remember, however, that there are other activities that attract tax, like purchasing with crypto or when you get paid in crypto for providing services and more).For short-term capital gains taxYou’re obliged to pay a short-term capital gains tax when you make gains from selling your crypto assets after holding them for less than a year. In the United States, the percentage you pay on short-term capital gains taxes largely depends on whether you’re single, married, or head of a household. The table below summarizes tax rates and the different percentages for each group. For crypto traders in the US, the IRS has a full tax rate list that applies to short-term traders and investors. For long-term capital gains You’re obliged to pay a long-term capital gains tax when you make gains from the sale of your cryptocurrency after holding it for over a year. The table below illustrates the tax rate for a long-term holder.Essentially, long-term capital gains tax rates are lower and more favorable to traders and investors than short-term capital gains tax rates. Thus, the tax system rewards those who hold their assets for a long time. hodl on for dear life. Crypto taxation in the UKIf you’re a crypto trader in the UK, you are obliged to pay capital gains tax or income tax, depending on your crypto activities. Buying and selling crypto attracts a capital gains tax, and receiving crypto as payment for services offered or as earnings from mining activities attracts an income tax. You’re exempted from paying tax if you earn between £0 and £12,500 on your crypto activities. For traders earning between £12,501 and £50,000, you will pay 20% on your crypto earnings. Her Majesty’s Revenue and Customs’ (HMRC) policy paper, describes in detail
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