Are cryptocurrency investors required to pay tax on their coins?
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Are cryptocurrency investors required to pay tax on their coins?
It depends on where you’re based, in some countries, bitcoins are treated as investments, something you buy at one price that can be sold later for a higher or lower price. If you sell at a higher price than you paid, you have made a profit and you will have to pay taxes on that profit. Until you actually sell the Bitcoins you haven’t made a profit and there is no tax owed. You could keep the coins for years and never have a tax bill.
Internal Revenue Service has a law that ensures taxes on bitcoin. The IRS is always more lenient with taxpayers who come forward on their own accord rather than those that get discovered. But as a responsible trader, it is better to come forward with paying IRS taxes for bitcoin.
That’s just the revenue taxes of bitcoin, you must have to pay taxes for your other crypto activities too like exchanging, receiving payments in crypto, and converting a cryptocurrency.