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bitcoin to ethereum swap cryptocurrency
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Are crypto-to-crypto trades taxable?
I understand the concern about reporting your cryptocurrency transactions to the IRS. When you exchange Bitcoin for Ethereum, it’s considered a disposal of assets, and the IRS treats it as a taxable event. This means you have to calculate the capital gain or loss from the transaction, whicRead more
I understand the concern about reporting your cryptocurrency transactions to the IRS. When you exchange Bitcoin for Ethereum, it’s considered a disposal of assets, and the IRS treats it as a taxable event. This means you have to calculate the capital gain or loss from the transaction, which is the difference between the fair market value of the Ethereum at the time of the trade and your cost basis in the Bitcoin. You report this on your tax return using Form 8949 and Schedule D. It’s not just when you cash out to fiat; any exchange of cryptocurrencies triggers a tax event. Keeping detailed records of your transactions, including dates, values, and gains or losses, will help you when it’s time to file your taxes. If you’re unsure about the process, it might be wise to consult with a tax professional who is knowledgeable about cryptocurrency taxation. Remember, staying compliant with IRS rules is crucial to avoid any potential issues.
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