Federal Tax, Tax

Cryptocurrency Exchanges May be Taxable

Do you invest in cryptocurrency? Keep in mind that selling it is a taxable event. The nature of the gain or loss depends on whether the cryptocurrency is a capital asset (for example, stocks, bonds and investment property) held by the taxpayer, as well as the length of time the position was held. What if a taxpayer receives virtual currency as payment for goods or services? It should be included in gross income at fair market value on the date received. Since it’s treated as property for federal tax purposes, exchanging crypto for goods or services results in its disposal. As a result, a short- or long-term gain or loss needs to be calculated and reported. Contact us with any questions. © 2022