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How to track and report crypto transactions for tax purposes



Cryptocurrency transactions in the United States are subject to tax, and it’s important to accurately track and report them. Here’s a summary of the key points:


  • πŸ’° Cryptocurrency transactions are subject to capital gains tax and income tax in the U.S.
  • πŸ’Ό Capital gains tax applies to profits from selling digital assets, while income tax applies to mining, staking, and receiving crypto as payment.
  • πŸ“Š Long-term capital gains tax rates range from 0% to 20% based on income brackets.
  • πŸ“ˆ Short-term gains are taxed as ordinary income with rates ranging from 10% to 37%.
  • ❌ Some transactions are not taxed, including purchasing with fiat currency, holding without selling, and gifting below $15,000.
  • πŸ“ Accurate tracking of transactions is crucial, and crypto tax software like Koinly, CoinLedger, and Accointing can help.
  • πŸ“‹ To report crypto holdings, use Form 8949 for capital gains and losses, and Form 1040 for crypto income.

Source: Cointelegraph


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