Cryptocurrency is taxed in the U.S. like any other investment, such as investing in stocks or bonds. So if you sell your Bitcoin at a loss, you want owe any taxes. But if you earned a profit, you can bet Uncle Sam (or your local government) will want a slice.
Cryptocurrency Taxation in the U.S.
If you sell cryptocurrency in the U.S., the transactions may or may not be reported to the IRS. However, if you submitted tax information when creating your account, assume your profits will be reported to the IRS.
Even if your earnings are not reported, it’s your responsibility to track and report your profits on your tax return. There are plenty of apps, mostly paid, that help you track every crypto transaction to generate accurate tax information.
Cryptocurrency Taxation Outside the U.S.
Outside of the U.S., your transactions may or may not be reported to your local government, depending on the regulations where you live. Unfortunately, we don’t have room to cover every country here, so check your national taxation authority’s website to learn more.