If you bought Cryptocurrency and it went up in value, that gain is taxable. If you don’t pay taxes on it, you   are committing income tax evasion, and could be subject to criminal prosecution.

Bitcoin, the first and most popular cryptocurrency reached a total market cap of over $1 trillion in early 2021.

The government considers cryptocurrency, like Bitcoin, to be “property”. Therefore, the taxable gain occurs when you sell the cryptocurrency, and turn it into cash.

If you have owned the cryptocurrency for over a year, the gain is considered a long term capital gain and taxed at a lower rate. If you have owned the cryptocurrency for less than a year, the gain is considered ordinary taxable income. In order to reduce the amount of taxes owed, you should hold on to the cryptocurrency for over a year if possible.

As you may have heard, legislation that is being considered in congress would beef up the amount of IRS auditing activity, and allow agents access to information for any transaction over $600.

One needs to keep all of this in mind to be cautious and avoid any unnecessary consequences.

Alexander Truluck focuses his practice as a criminal defense attorney in Clearwater, Palm Harbor, Largo, Dunedin and the Tampa Bay area.

For more information, visit our website at http://www.criminallawyerclearwaterflorida.com
or call (727) 799-3550.