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dameon-huber
New Member

If I wanted to invest in different crypto currencies, how does the taxes of it work? Am I taxed if I withdraw money or is it taxed based on what it shows earning?

 
1 Reply
MichaelDC
New Member

If I wanted to invest in different crypto currencies, how does the taxes of it work? Am I taxed if I withdraw money or is it taxed based on what it shows earning?

You are not taxed until you sell your position/trade (withdraw your money). This is then called a capital gain.

Capital gains are reported as part of Schedule D.

Here’s what to do:

1.       Sign in to TurboTax and select the Take me to my return

2.       Search for “Schedule D” and then select the “Jump to” link in the search results.

3.       Now follow the screens to enter your info.

When recording your transactions include:

·         When you acquired the coins and how much you paid.

·         When you sold the coins and how much you received.

You must do this for every trade you made. If you bought coins at different prices or sold partial amounts, then you must keep track and record the difference of what you sold. You can do this yourself in Excel or another spreadsheet. There are also new services that are specializing in the conversion, which you can find online. You can import all your trading, spending and mining, and then create a file to import or include with your taxes.

 

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