Bitcoin and Taxes

[amastewa93]

Many people on other online forums seem to be a bit confused about the way bitcoin and taxes work...

Taxation of bitcoin and other cryptocurrencies is pretty similar to the way you pay taxes on any other type of investment. If you had held the cryptocurrency for less than a year, the sale is taxable as income tax; hold it for more than a year before selling it, you pay the capital gains tax rate, which is lower... Either way, the IRS knows you've got the crypto cash, right?

Have any of you guys bought, or sold, bitcoin? Any idea how it will impact your taxes?

[scfr]

I've not dealt in cryptocurrency. As a US taxpayer, if I wanted to know about cryptocurrency and federal income taxes, I would "go to the source" and visit IRS.gov and get the information I needed. I would not rely on information from a forum. If I was unsure about how to interpret any of the information I got on the IRS.gov web site, I would call the IRS and ask my questions. Then I'd call them again a few days later to make sure I got the same information from a different agent. If I got conflicting information or was still confused, as a Turbo Tax user I might see what information I could get from TT, but more likely I would pay to consult a reputable CPA.

As far as whether or not the IRS knew that I had cryptocurrency, that's not relevant. If I owe taxes, I owe taxes.

[Like2Plan]

amastewa93,

I have never owned a cyptocurrency, but out of interest I have read some articles on it.

As you mentioned, I believe it is treated as a security as far as the IRS is concerned. One article I read described using it as currency to buy coffee and cake at a coffee shop that only accepted cypto cash as a form of payment.

So, buying the coffee and cake using cypto cash would result in a taxable event.
Here is a link your may find amusing Buying and Spending Bitcoin

[corn18]

I have heard a lot about Bitcoin and Cryptocurrency. But honestly I didn't buy or sell any Bitcoin or Cryptocurrency yet.

I'd wait and let the dust settle. Bitcoin has lost over 50% in the last 60 days.