This is considered ordinary income and is taxed at its marginal tax rate, which could range from 10 to 37%. In the United States, cryptocurrencies can be taxed as ordinary income or capital gains, depending on the taxable event that produced the profits. Short-term gains are taxed at the ordinary income rate, which is usually a higher and less favorable rate. The IRS classifies cryptocurrencies as a type of property, rather than a currency.
For those looking to diversify their investments, a Gold IRA rollover review can provide insight into the potential benefits of investing in gold. If you receive Bitcoin as payment, you must pay income taxes on its current value. If you sell a cryptocurrency for profit, you pay taxes on the difference between the purchase price and the product of the sale. Yes, your Bitcoin, Ethereum and other cryptocurrencies are subject to taxes. The IRS considers cryptocurrency holdings to be “property” for tax purposes, meaning that your virtual currency is taxed in the same way as any other asset you hold, such as stocks or gold.