Investing.com – You probably know by now that the IRS expects you to pay taxes on your cryptocurrency holdings but you may not know exactly what to do.
Here are some key points to remember.
The IRS wants you to report each time you bought and sold a cryptocurrency. That includes selling one to buy another or when you used a cryptocurrency to purchase a good or service. In every case, you need to know the value of the currency at the time you acquired it and the time you disposed of it. The difference between the two is your profit, on which you pay taxes, or loss, which can offset other gains.
That, of course, requires, good recordkeeping. Most exchanges don’t send customers trading statements for tax purposes, so it is up to you.
If you didn’t keep records, websites such as .tax and Cointrackng.info will help you track down the transaction dates and values for a small fee.
Finally, you can use a tax advisor. Some have access to historical price data or software that interacts with your Coinbase account and pulls the trading information.
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