In many countries, cryptocurrencies are subject to tax.
A taxable event is a transaction or activity you're required to pay taxes on.
A taxable event will leave you with capital gains (profit) or capital losses.
Generally speaking, taxable events include:
If you've bought crypto, HODLed, and sold it later, your tax liability should be fairly easy to calculate. Let's look at a simplified, US-based example.
Here's the formula:
Imagine you bought 2 BTC for $10,000 and sold them two years later for $30,000. You've now made $40,000 in capital gains: $60,000 (fair market value) - $20,000 (cost basis) = $40,000 (capital gains)
In many countries, tax authorities require you to file your taxes regularly.
This can be the case even if you owe zero taxes or need a refund. Failure to file can result in fees, penalties, interest, confiscated refunds, audits.
Getting your taxes right is essential.
❤️ Brainstash Inc.