Crypto investors filing their taxes must know how to track cost basis, maintain good records of all original purchases and transactions, and report everything in USD terms. MilesBrooksTax writes
that found that almost 25% of crypto investors who didn’t report crypto on their tax return said they didn’t know crypto was taxable. Another 20% said they didn’t know how to report their crypto activity.can help ensure investors avoid IRS scrutiny, which has grown sharper in recent years as more people invest in digital assets. As you file this year’s crypto taxes, here are also three important, common-sense tips to help you avoid the IRS' notice.
A common misconception is that if you don’t trade crypto back to U.S. dollars, you do not owe taxes on any gain. But trading one crypto for another is a disposal event, which is taxable and must be reported. You won’t end up paying taxes on the same income twice. The income you report on your tax return from earning the coins becomes your cost basis in those coins – which reduces the amount of tax you pay when you eventually sell.Know when to mark ‘yes’ to the front-page question about virtual currency
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