Since the dawn of cryptocurrencies, it has always been a topic of controversy, mainly due to its decentralized character, that is, its inoperability with banks, authorities, and other institutions. Nevertheless, it might surprise you to know that there are taxes associated with cryptocurrencies, and Mayrsson TG is here to provide valuable insights to all the traders out there!
Taxes on Cryptocurrencies: A Myth or a Fact?
In recent times, there have been more than 1,500 virtual currencies, such as Bitcoin, Ethereum, Dogecoin, Matic, Ripple, etc., and both the investment and trading of cryptocurrencies have increased to a great extent. Now that this is considered to be a digital asset similar to stocks and other assets, the money one gains from crypto gets taxed at different rates.
Thus, to have a better understanding of whether or not you owe taxes, it is important to first understand how you use crypto. Moreover, Mayrsson TG further breaks it down for simplification. There are two events known as taxable and non-taxable events.
Taxable events
If you have a crypto and sell it for the same amount in U.S. dollars, then you need to pay taxes if the selling amount is higher than what you initially paid for. Now, if you face a loss, you can deduct the same loss from your taxes.
Another aspect that Mayrsson TG noticed in terms of TX-related issues is using Bitcoin to buy Ethereum. Since this is a sale, the IRS considered it to be taxable. Here again, you will need to pay the taxes if you sold the bitcoin at a higher price than you purchased it.
On the other hand, if you receive a payment in crypto, it will get taxed as compensation as per your income tax grade.
Non-Taxable Events
After noticing how cryptocurrency is traded in the market, Mayrsson TG highlighted a few aspects related to non-taxable events.
If you buy crypto using cash and hold it, you do not need to pay any tax as it gets incurred at a much later stage when the gains are increased.
Donating crypto to a non-profit, or for either receiving or giving as a gift, you do not need to pay taxes as long as the amount stays within $17,000.
Mayrsson TG Explains How Cryptocurrency Works
The IRS views cryptocurrency as an asset; hence, when it is used as payment or cash, it often triggers tax. Depending on the usage of the crypto, there are a variety of IRS forms, including Form 8949, Schedule C, Form 1040, and Schedule D.
As most cryptocurrency platforms do not usually send any tax forms, it is important to store the receipts of all the transactions to date.
Wrapping Up!
Cryptocurrency is complex and has a variety of layers added to it. In certain cases, you can get taxed for using a crypto multiple times. Thus, consulting with a professional can benefit you in multiple ways. Connect with Mayrsson TG today and report your taxes correctly!
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