Cryptocurrency Tax Laws: What U.S. Taxpayers Should Know as Tax Day Approaches

Did you trade or sell Bitcoin, Ether, or other digital currencies in 2020? If so, you’ll have information you need to report on your tax return. With the tax deadline rapidly approaching, TaxBit’s CPAs and tax attorneys are breaking down the cryptocurrency tax laws to make this process as simple as possible. Contrary to popular belief, taxes on crypto doesn’t always equate to bad news. If you sold crypto at a loss or donated or gifted crypto in 2020, you may actually be able to reduce your tax liability.

Let’s start with the basics.

Do you pay taxes on cryptocurrency?

Yes, you pay taxes on cryptocurrency gains when you dispose of an asset, much like stocks. This could include: selling your crypto for cash, trading one cryptocurrency for another, or using crypto as payment. You could also pay taxes on cryptocurrency earned as income through mining, staking, or getting paid in crypto.

Seth Wilks | Yahoo Finance

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