Some tax professionals are bracing for more crypto scrutiny as the IRS beefs up digital asset service, reporting, compliance and enforcement programs.
When you trade digital currency or sell it at a profit, it may be subject to capital gains or regular income taxes, depending on the"holding period" or how long you owned the asset.Whether you're a longtime crypto investor or recently purchased digital assets, here are some key things to know from crypto tax experts.
For 2023, you must answer"yes" if you sold crypto; traded one coin for another; or received digital currency as a payment, reward or award, according to"Yes-or-no questions are quite powerful," said Andrew Gordon, tax attorney, certified public accountant and president of Gordon Law Group. "They're treated the same as stocks or other property," and the gain is the difference between your"basis" or purchase price and the value when you sell or exchange the asset, Gordon said.