Cryptocurrency is considered a capital asset. This means it’s subject to capital gains tax. With capital gains tax, you don’t need to report the purchases of your crypto assets to the IRS, but you do need to report your disposals when you file your taxes.
Anytime you sell your crypto for fiat money like USD, exchange your crypto for another asset, or use crypto to pay for goods or services, that’s considered a taxable event.
If you’d like to learn more about which taxable events will be shown in TaxBit, check out our article TaxBit’s Transaction Types.
If you’d like to learn more about the capital gains tax on crypto, you’ll find some great information on our blog post Cryptocurrency Tax Reporting, Clarified: What To Include on Your Tax Return.
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