Bitcoin day trading taxes washington state
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That is comforting to me. Bitcoin and crypto are a bit like religion. But at least some people are stepping back and taking money off the table. I would encourage everyone to think about at least taking their cost off the table and playing with the house money at these levels. The IRS issued this guidance back in the spring of These FAQs provide basic information on the U. The notice provides that virtual currency is treated as property for U. General tax principles that apply to property transactions apply to transactions using virtual currency.
Among other things, this means that: I have always thought about Bitcoin and other crypto assets like stocks when it comes to capital gains. When you sell the coins, you owe capital gains taxes on the gains. I assume the answer to the last question is yes and that you can use whichever of the three methods to calculate gains but you need to use them consistently and that requires you to track your buys and sells very carefully.
We have very good tax advisors who bitcoin day trading taxes washington state figure this stuff out for us. Hopefully, there are some tax advisors in the AVC audience who will weigh in with answers and likely more issues to be considered. So if you are an expert in this stuff, please take the time to bitcoin day trading taxes washington state all of some answers in the comments this morning. November 29, — crypto.
So, if you are US taxpayer, what do you owe in taxes on these gains? Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes. Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply.
Normally, payers must issue Form The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer. A payment made using virtual currency is subject to information reporting to the same extent as any other payment made bitcoin day trading taxes washington state property. But how do you calculate the gains? Do you need to identify the exact coins you sold and go back to determine how much you paid for bitcoin day trading taxes washington state and then calculate the gain on those coins and the taxes owed?
Do you use the average cost of your entire position and then determine the gains and taxes owed? And if you held the coins for longer than twelve months, do you benefit from capital gains rates vs ordinary income rates?
November 29, — crypto Tweet. Newer post Meditation Older post Meetup.