Crypto Currency and Taxes

[Hotpizza]

How is everyone handling this? Profit or loss supposedly you have to claim it on your taxes. How do they know if you even had crypto and sold for gain or loss.

Just curious and maybe Willie99 the Tax Guru can chime in and give some advice.

 

[slapshot]

Crazy think of the paperwork heard some places won’t touch your taxes if crypto currency is involved

 

[Willie99]

Crypto currency transactions are treated similar to stock transactions for US tax purposes. It's either a long term or short term capital gain, with the gain or loss being recognized either when you sell the currency OR when you use the currency to make a purchase.

If you use it frequently, there's obviously a lot to be reported

I have no extensive first hand experience in dealing with crypto currencies, so that's all I got. I'm citing an IRS ruling from 2019

 

[Hotpizza]

I would assume short term would be 1 year and under and long term over 1 year. Looks like I have a lot of paperwork to come up with to determine what the final figure was...…...