Learn more about crypto with this collection
Understanding the basics of cryptocurrency
How to store cryptocurrency securely
Risks and benefits of investing in cryptocurrency
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)
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Generally speaking, taxable events include:
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Getting your taxes right is essential.
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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.
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A taxable event is a transaction or activity you're required to pay taxes on.
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In many countries, cryptocurrencies are subject to tax.
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