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Sean Fogarty
Taxpayers who buy and sell cryptocurrencies need to declare the capital gains and losses in the same manner that you would record a sale of shares on the stock exchange. Keep track of the purchase date and amount (cost basis) and the sale date and amount (sale proceeds). If you owned your Bitcoin for over 1 year, then it would be classified as a long term capital gain and subject to long term capital gain income tax law. If under 1 year then it would be short term. The general tax principles applicable to property transactions apply to virtual currency.
Have a question about cryptocurrency trades? Contact Sean Fogarty.
Sean Fogarty CIA EA
Fogarty Enterprises LLC
763-286-8256
fogarty777@gmail.com
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180 weeks ago
Have a question about cryptocurrency trades? Contact Sean Fogarty.
Sean Fogarty CIA EA
Fogarty Enterprises LLC
763-286-8256
fogarty777@gmail.com
Karen Swanson, EA
If you mine a cryptocurrency such as Bitcoin you report it as ordinary income. Not a capital gain.
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172 weeks ago
Sean Fogarty
Hi Karen, true, I mine cryptocurrency myself and report it on my Schedule C business income. Thanks for adding this point of clarification. Most people I meet are trading cryptocurrency on sites such as Coinbase. Yes, cryptocurrency mining is a whole different realm.
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171 weeks ago