Good afternoon, David 2023! Thank you for joining us!
You asked " The brokers will pay the withdrawals out in crypto. What exactly would I be taxed on? ...The crypto I receive and sell (at relatively the same price/value) to then transfer to my bank? ...the gains I made from the broker?...the type of of investment I gained from (forex)? Something else?"
Inferring, these are the actions you would be taking, I am listing the step, and the tax implication of each:
- You trade Forex,you will have normal Forex gains/losses. This will be taxed as ordinary income if they are section 988, or if they are section 1256 contracts they will be taxed as capital gains or losses.
- You withdraw crypto currency from the broker, this in itself, is not a taxable transaction. if you convert US dollars to crypto, then it’s the purchase of a capital asset.
- You then convert this crypto into cash. This would be consideed a taxable sale and you could potentially have a gain or loss depending on your basis. and whether or not you have fees associated with the sale.
Here are some additional resources you may find helpful:
Hopefully this information helps!
Terri
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Terri Lynn
