Do I Pay Taxes on Cryptocurrency?

by May 24, 2021Tax Accounting

Do I pay taxes on cryptocurrency?

Did someone pay you in virtual currency?

If you were paid with virtual currency for goods or services, then, yes, that payments is taxable income.

Was your cryptocurrency received in an airdrop or in a marketing promo?

If the answer is yes, then the cryptocurrency is taxable income.

Did you “mine” your virtual currency?

If you worked to “mine” your currency and received crypto tokens for your work, you owe taxes on that income.

Did you sell any cryptocurrency for more than you paid for it?

If yes, this is an investment gain, and you owe capital gains taxes on it.

Did you exchange one virtual currency for another crypto?

If you converted one cryptocurrency for another, you do owe taxes on any gains resulting from the transaction.

Need Help Reporting Cryptocurrency on Your Taxes?

For help with your cryptocurrency tax planning and income tax preparation, give us a call.

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