How is my crypto taxed?
We're getting questions about the tax on profits from the sale of Crypto. Let us cover the rules.
If you sell your position in crypto, you're taxed on the profits. Profits are measured just like any other investment: sales proceeds less your cost basis = profit. If you held the position for more than a year, you qualify for lower long term capital gain rates. If your sales proceeds are less than cost basis, you have a deductible loss.
If you sell your position of crypto, and take the sales proceeds and reinvest in another cryptocurrency, you still owe tax on the profits from the sale. In other words, there's no tax deferral available (there used to be deferral for sales before 2018).
Hope this helps. If you have questions, please let us know.