How to Pay Tax on Bitcoin Gains and Report it to the IRS in 2019

Bitcoin taxation basics

  • Trading cryptocurrency to fiat currencies like USD
  • Trading cryptocurrency to another cryptocurrency
  • Receiving cryptocurrency as a payment for goods and services
  • Cryptocurrency mining
  • Buying cryptocurrency
  • Wallet to wallet transaction
  • Sending Bitcoin as a gift
  • Holding BTC

Calculate the capital gain/loss

Learn your Bitcoin tax rate

  • If you hold BTC for one year or less — you got short-term gains
  • If you hold BTC for more than one year — you got long-term gains

How to calculate Bitcoin taxes?

  • You are a single person who makes up to $25,000 per year
  • You bought BTC in December 2018 and sold it in January 2019 resulting in $2900 gains
  • You’ve held your funds only for 2 months — you’ve made short term gains
  • The tax rate for you is 12%
  • $2900 * 12% = $348 — is how much you have to pay in taxes

How to report to the IRS

But what if I’ve had losses

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