TheWord: Cryptocurrency. We did a deep dive on this hot topic of digital currency (think: Bitcoin) last month, and now we’re going back to the bank to figure out how digital currency is taxed. Yes, taxes are still a thing when it comes to crypto.
DYK? There are 5,000+ different cryptocurrencies currently in circulation. If you own any, like Bitcoin, it’s important to understand how it impacts your tax liability every time you buy, sell, or mine it. 💰
The IRS treats all cryptocurrency as capital assets (read: like stock), taxing them when they’re sold at a profit. This means that if your crypto investment loses value, you can report it as a capital loss. Selling cryptocurrency for cash, trading one cryptocurrency for another, using it as payment for a merchant (like Huck & Peck, NoogaLabs or Whole Foods), mining it, or getting paid in crypto can all be taxable. However, transferring the same cryptocurrency from one exchange or wallet to another is not taxable. Neither is buying cryptocurrency, or — in some cases — gifting or donating it.
Learn more from local pros. Ⓟ