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  • Writer's pictureBen David Jackson

What Cryptocurrency Investors Should Know About Filing Taxes





Cryptocurrency has gained significant popularity over the years, attracting a large number of investors seeking to capitalize on this digital revolution. However, with this growing interest comes the need for investors to understand their tax obligations when it comes to cryptocurrencies. In a recent article by CNBC, important aspects of filing taxes as a cryptocurrency investor are outlined. In this blog post, we'll delve into the key points raised in the article and explore what cryptocurrency investors should know about filing taxes.




Cryptocurrency as Property:

One crucial aspect to grasp is that the Internal Revenue Service (IRS) treats cryptocurrency as property rather than currency for tax purposes. This means that whenever you sell, trade, or exchange cryptocurrencies, it may be subject to capital gains tax, similar to stocks or real estate.




Taxable Events:

According to the CNBC article, taxable events occur when cryptocurrency is sold, exchanged for goods or services, or converted to another cryptocurrency. Each of these events may trigger a taxable event, potentially incurring capital gains or losses.




Record-Keeping:

Accurate record-keeping is essential for cryptocurrency investors. It is crucial to maintain detailed records of transactions, including dates, transaction values, and the fair market value of the cryptocurrency at the time of the transaction. Keeping thorough records will help ensure accurate reporting and ease the process of filing taxes.




Reporting Requirements:

Cryptocurrency investors are required to report their gains or losses on their tax returns. The IRS expects taxpayers to report all transactions involving cryptocurrencies, including those that have resulted in gains or losses. Failure to report cryptocurrency transactions may lead to penalties or audit risks.




Third-Party Reporting:

Cryptocurrency exchanges and payment processors are now subject to increased scrutiny and reporting requirements. The article points out that cryptocurrency exchanges are now mandated to report certain transactions to the IRS. Consequently, it is crucial for investors to ensure that their reported transactions align with the information provided by exchanges.




Tax Professionals and Software:

Given the complexities surrounding cryptocurrency taxation, seeking assistance from tax professionals or using specialized software can be a wise decision. Tax professionals with expertise in cryptocurrency taxation can provide guidance on accurately reporting transactions and maximizing deductions, if applicable.



As the popularity of cryptocurrencies continues to grow, it is essential for investors to understand their tax obligations. The CNBC article highlights key aspects of filing taxes as a cryptocurrency investor, emphasizing the importance of proper record-keeping, reporting requirements, and seeking professional assistance if needed. By staying informed and being proactive about tax obligations, cryptocurrency investors can navigate the taxation landscape with confidence and ensure compliance with legal requirements.





Please note that this blog post is a summary of the CNBC article and does not constitute legal or financial advice. It is always recommended to consult with a qualified tax professional for personalized guidance based on your specific situation

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