Short-Term Crypto are Taxed by Gross or Net?

[Tmantho27]

Is short-term crypto one of those things where you can pay tax even if your net gains are zero?

Example:

Event 1: Sell BTC for profit of $50,000 

Event 2: Sell BTC for loss of $100,000

Event 3: Sell BTC for profit of $50,000

Do you pay taxes on $0? or on $100,000?

Does it matter if you are professional or casual trader?

I ask because I know with gambling winnings, it does depend whether you are a professional gambler or amateur. For example, if you are an amateur, you can have a net gambling winnings of zero and still owe a tax bill because it's taxed differently. I was wondering if trading is the same?

[Anonymous_ · Accepted solution]

If you are not in the trade or business of selling crypto, then refer to the information at the link below (which essentially states it is treated as a capital asset - i.e., net gains and losses).

https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-curren...

[fanfare]

If you are up 50, down 100, up 50, you evened out.

The tax on zero gain is zero.