The IRS is looking carefully at cryptocurrency transactions, so proper record keeping is advised and TurboTax expert Lisa Greene-Lewis provides examples of the different ways that cryptocurrency transactions are taxable.
For some, cryptocurrencies are an investment and taxed as capital gains when sold, for others, crypto is a form of wages for work done and is reported on the appropriate tax forms. Watch the video above from our sponsors at TurboTax.
Frequently Asked Cryptocurrency Tax Questions:
- Is cryptocurrency (bitcoin) taxed like real estate? Yes. Think of it as property.
- If I make a purchase in crypto will I be taxed? Yes. You will recognize a gain or loss based on the bear market value of whatever you purchased.
- If I hold cryptocurrency for less than a year, am I taxed? Yes. If you have owned any cryptocurrency for less than 365 days, any profits are short-term capital gains. If you own it for more than 365 days, it is long-term capital gains.
TheStreet partnered with TurboTax to answer all of your tax questions in 2021.