Bitcoin's (BTC-USD) price has been on an upward trajectory since Donald Trump's election as the 47th US president. However, some of those gains have now been reversed. What does this mean for cryptocurrency investors and their tax obligations?
Tax attorney and CPA Andrew Gordon of Gordon Law joins Wealth! to discuss the tax implications for crypto investors.
Gordon notes that investors are only taxed on their bitcoin gains if they sell or exchange the cryptocurrency. However, he notes "there are ways that you can minimize that tax."
One strategy Gordon recommends is to harvest losses from other property or stocks to "use it against those bitcoin gains." He also advises holding crypto long-term, as "the difference between your original price and your later sales price" will be taxed at a lower rate.
Gordon explains, "As your gains increase, typically your tax rate also increases as well. And with cryptocurrency, just like other stocks, you're taxed on the gains." By employing tax minimization tactics, crypto investors may be able to offset their bitcoin profits and reduce their overall tax burden.
source: finance.yahoo.com
