With cryptocurrency becoming mainstream, the IRS has updated its tax regulations:
- Crypto as Property: Cryptocurrencies are taxed as property, meaning capital gains tax applies when you sell or trade them.
- Taxable Events: Selling, exchanging, or using crypto for purchases triggers a taxable event.
- Reporting Requirements: Crypto transactions must be reported on IRS Form 8949 and Schedule D.
- Reducing Liability: Strategies such as tax-loss harvesting and holding assets for long-term gains can reduce your tax bill.
Understanding these rules will help crypto investors stay compliant and optimize tax savings.
