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melseoulwishes
New Member

If I bought bitcoin, and sent it to someone's wallet address to withdrawal, is it taxable?

Cashapp bitcoin
4 Replies
DawnC
Expert Alumni

If I bought bitcoin, and sent it to someone's wallet address to withdrawal, is it taxable?

Yes, if you spent it on goods or services, you have effectively exchange the bitcoin - and that is a taxable transaction.   The difference between the amount you paid for it and the amount you exchanged it for is the taxable gain or loss amount.   

 

Like property sales or the sale of stock, any gain or loss from the sale or trade of cryptocurrency is reported as a capital gain or loss. If you buy and sell it within 12 months, it’s treated as a short-term capital gain. If you hold it for over 12 months, it’s taxed at the lower, long-term, capital gain rates.    Here is how to enter the transaction.  

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melseoulwishes
New Member

If I bought bitcoin, and sent it to someone's wallet address to withdrawal, is it taxable?

I did not sell or trade it. I sent it to someone's wallet so they can withdraw it themselves. 

gasinse1
Returning Member

If I bought bitcoin, and sent it to someone's wallet address to withdrawal, is it taxable?

I think it's more likely yes than no.

Critter-3
Level 15

If I bought bitcoin, and sent it to someone's wallet address to withdrawal, is it taxable?

If you GAVE it to the other person and they "sold" it then they will have to report the sale using your basis.  This is a gift like any other gift of stock.  You may need to file a gift tax return if you gave more than $15K  in one tax year to any person. 

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