/biz/ - Business & Finance

I really don't understand why people make this out to be so complicated when it really isn't. Crypto is taxed as Capital Gains (or Capital Loss). IF you REALIZE a gain (trading or selling your coin for any other coin OR USD at a profit) you then incur a tax liability for that transaction.
This Capital Gain is either a Long Term or Short Term gain. A short term gain is an asset that was held for 1 year or less. A long term gain is an asset that was held for more than 1 year. A short term gain is taxed at NORMAL INCOME TAX RATES (pic related). A long term gain is taxed differently, but still based on your income bracket (pic related).
The smartest way to trade crypto's (if you're sensitive to tax liabilities) is to set aside a portion of your profits from each trade for the tax liability incurred from the gain. That way, come tax season, you already have the money required for taxes, and you didn't lose it in the market.

Any questions?