Cryptocurrency investing and taxes

Photo by David McBee from Pexels
Cryptocurrencies like Bitcoin can make an interesting investment opportunity for a $25.00 investment.  Notice I said interesting, not good, nor bad, but interesting.  Interesting because it is easy to invest $25.00 at a time.  Some coins like Ripple are trading for about $.30 a piece today while Bitcoin is trading at over $8,000.00 a piece.  Yet, with $25.00 you can buy some of either.  Cryptocurrencies do not need to be bought or sold as a whole coin.  You can easily buy 1/1000 of a Bitcoin or even less.

I am not going to include in this article the basics for getting started in crypto currency trading as that will be a whole article by itself.  Cryptocurrency is a different and volatile world.  Some people have made a lot of money, more people have lost a lot of money.  By investing small amounts you can learn the ins and outs of cryptocurrencies, trading, exchanges, wallets etc.

Instead, there has been another interesting development in cryptocurrency trading at least here in the United States of America.  I of course refer to the recent notice that the IRS is now going to be looking closely at taxes for trading Bitcoin and the like.  In an article IRS Issues New Guidance On Taxation of Cryptocurrency,  Tax Attorney Justin Woodward over at TaxBit discusses the implications of this new guidance.  Definitely worth a read it you have been or are thinking of trading crypto.

I have been trading Bitcoin, Etherium, Ripple and Litecoin for a couple of years now.  I have some Bitcoin I bought at $17,000 and some I bought at $3,000.  For the last couple of years in doing my taxes I haven't even been able to tell if I should report a gain or a loss from the reports or lack of reports from the exchanges.  This year I will have real forms to submit to the IRS.  I am even making a profit this year (so far). 

Full disclosure:  I work full-time for TaxBit.


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