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Author: Admin | 2025-04-28
To pay for goods or services, it is considered a taxable event by the IRS. This means that any gains or losses from the value of the cryptocurrency at the time of purchase will need to be reported on your taxes.The IRS treats cryptocurrencies as property, so even using them in everyday transactions can have tax consequences. It’s important to keep accurate records and report these transactions properly to avoid any potential penalties or audits from the IRS.Capital gains treatment for crypto tradingWhen you trade cryptocurrencies like Bitcoin, the IRS treats it as a capital asset. This means that any gains or profits you make from trading crypto are subject to capital gains tax.If you sell your cryptocurrency for more than what you paid for it, then you will owe taxes on those gains. The amount of tax you pay depends on how long you held the crypto before selling it.If you held it for less than a year, it is considered short-term capital gains and taxed at your ordinary income tax rate. But if you held it for more than a year, it is considered long-term capital gains and may be taxed at a lower rate.Different treatment for crypto minersCrypto miners, who use their computers to verify and record transactions on the blockchain, are treated differently for tax purposes. The IRS considers mining as a form of self-employment income, which means it is subject to both income tax and self-employment tax.This means that miners need to report their mining
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