Do I have to pay taxes when I buy or sell crypto?
- Your taxes will depend on your location, how long you've held your crypto, the type of activity you're doing, and other factors.
- In general, you'll probably need to pay taxes or offset losses for selling but not when you buy.
- As a fairly new asset, tax authorities are still developing crypto regulations.
- It's your responsibility to keep track of your taxable gains and losses and pay the right amount of tax, according to your country’s regulatory framework.
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What’s a taxable event?
A taxable event is a transaction or activity you're required to pay taxes on.
- A taxable event in one country might not be one in another.
- Typically, transactions involving the sale of commodities, investments, and other capital assets are all taxable.
- Selling or tradi...
How do I calculate my taxes?
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:
- Fair market value - Cost basis = Capital gain / Loss
- The...
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