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Level 2
posted Jan 21, 2022 6:40:10 AM

Using crypto as currency not investment

An online merchant I frequent will be moving away from credit cards and accepting crypto only.  So my question is if I buy crypto on an exchange and immediately (no holding at all) transfer it to the merchant’s wallet do I need to report it?

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1 Best answer
Expert Alumni
Jan 21, 2022 8:06:32 AM

No, the holding period does not matter for reporting purposes.  You will still be required to report the transactions. 

3 Replies
Expert Alumni
Jan 21, 2022 7:43:15 AM

Yes.  All transactions are reportable.  If you purchase and hold it then there is no taxable transactions, however when you convert it, the transaction is reportable.

 

Examples of disposals include the following: 

  • Trading or selling crypto for fiat currency (like USD) 

  • Trading one crypto for another cryptocurrency

  • Spending crypto to buy a good or service

Level 2
Jan 21, 2022 7:56:42 AM

So the holding period doesn’t matter?

Expert Alumni
Jan 21, 2022 8:06:32 AM

No, the holding period does not matter for reporting purposes.  You will still be required to report the transactions.