Making a Large Purchase With Bitcoin? Here Are the Tax Implications

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Making a big purchase with cryptocurrency? Maybe you're thinking about buying a car or other sizeable purchase with bitcoin?  It may seem like an incredible deal, but CPA and TurboTax Expert ( (INTU) - Get Intuit Inc. (INTU) Report) Lisa Greene-Lewis says, not so fast.

In the video above, Greene explains how using bitcoin to make a large purchase will impact the amount of tax paid depending on the value of bitcoin when the purchase is purchased.

Frequently Asked Cryptocurrency 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 is partnering with TurboTax for 2021 to answer all of your tax questions.

 

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