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.