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6 replies

MarilynG
MarilynG
Alumni - Intuit
Mar 28, 2024 4:33 PM UTC

For tax purposes, crypto is either considered earned income or treated as property sales.

 

It’s treated as a property sale (with capital gains or losses) when you:

 

  • Sell it (like you would stock)
  • Exchange it (swap one type of crypto for another)
  • Spend it (use it as payment for goods and services)
  • Convert it to US dollars (sell crypto to buy regular currency)

If someone pays you in crypto and then you sell it for a profit, you'll pay taxes on the income and pay the capital gains tax.

 

The gain is calculated like selling a stock; the difference between your Cost Basis and the Sales Price, and whether it was long-term or short-term. 

 

Here's more info on How to Report Crypto as Capital Gain and How Capital Gains are Taxed.

 

Be sure to check out our new Crypto Investor Center. 

 

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AlfonsorAuthor
Level 2
Mar 28, 2024 4:41 PM UTC

How do you calculate the cost basis? 

RobertB4444
Alumni - Intuit
Mar 28, 2024 4:44 PM UTC

The cost basis is what you paid for the crypto.

 

@Alfonsor 

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