Skip to content

Crypto Tax Guide: Understanding Crypto Taxes at a Glance

  • 2 min read
  • Latest

Are you struggling to understand what the tax implications of trading crypto might be?

In this quick guide produced by the crypto tax experts at Ledgible, we’ll walk through the basic things you’ll need to know about crypto taxes globally. There’s no need to read through thousands of words about crypto tax, we’ve got all of your questions answered here as simply as possible.

How is cryptocurrency taxed?

In the US, crypto is taxed as property, meaning that regular capital gains taxes apply to the currency. In other countries, the situation varies greatly. The following countries are seen as crypto tax havens, meaning they have no taxes on cryptocurrency:

  • Singapore
  • Malaysia
  • Portugal
  • Malta
  • El Salvador
  • Cayman Islands
  • Germany
  • Switzerland
  • Puerto Rico

But not all countries are as friendly to crypto taxes. Belgium taxes crypto gains at a flat 33%, the Philipines at 35%, and Iceland at up to 46%! All this means that if you want to abide by the local tax codes when trading, you’ll want to look up your respective countries’ crypto tax guidelines, which most established economies have published.

How does the IRS treat/classify crypto in the US?

As Property. In Notice 2014-21, the IRS classifies crypto as property, meaning that we taxpayers must pay standard capital gains on the transactions. This tax law actually benefits long-term HODLers, as long-term capital gains rates are significantly lower than short-term capital gains rates.

You’ll pay taxes on crypto on the same tax deadline as regular taxes, generally on forms such as the 8949, through the filing of a 1099-B or 1099-DA, all categorized on your 1040 return.

Which transactions are taxable?

In crypto, if you look at it wrong, it’s probably a crypto-taxable event. While that statement is said in slight jest, it’s largely true. Essentially every time crypto is exchanged, converted, sold, or traded, it’s likely a taxable event. 

This is why automated
Read Full Article…