Your friend tells you about cryptocurrency. You open a wallet. You start trading. It’s fun! You’re making money like a degen.
Then one day you realize that crypto, while considered “alternative finance,” isn’t immune to tax. The Internal Revenue Service and other authorities want their share of your sicc gainz. Suddenly you know that all those transactions you’ve been making are taxable. You owe money on your gains and now, holy moly, the price of BTC is falling, and with it the rest of the market. You realize you need to sell half your stash just to cover your bill.
See more from Tax Week.
This scenario, in fact, has befallen many newbies to crypto, as Jeff Wilser details in this week’s “Crypto Tax Nightmares” story. Many people have flown into crypto with alacrity only to get a nasty fright when they realize they haven’t held back what they owe.
CoinDesk’s Tax Week, dropping Feb. 21-25, is all about the crypto community’s struggles and confusions with taxes. We feel your pain! And we do our best to help, calling upon the experts in the crypto tax business to explain everything as clearly as possible.
But in some cases not even the experts are sure what the proper guidance is; the authorities have yet to say definitively, leaving consequential issues open to interpretation.
Non-fungible tokens (NFT), which opened up crypto to many last year, are one still-ambiguous area. Staking, airdrops and various aspects of decentralized finance (DeFi) are others.
Check out our continuing coverage this tax season, including advice posts and explainers, features (see our report on crypto tax “exiles”), research, TV, podcasts and more. We’ll publish it all here.
We hope to reduce the confusion and help you save money by only paying what you really owe.
Further Reading on CoinDesk's Tax Week
To offset the impact of rising inflation, the IRS has revised a number of tax provisions to let people keep more of their money in their wallets for the 2022 tax year.
U.K. citizens that invested or dealt with crypto over the last year may be required to pay taxes on their trades. Here's what you need to know.
Like many jurisdictions, crypto assets are treated as "property" in Canada, meaning investors will owe taxes to the Canadian Revenue Agency (CRA) in certain situations.
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