Bitcoin speculators are in the midst of another wild ride in the crypto-currency’s price, which shot up as high as $13,387.26/bitcoin on June 26 after having settled for months in the $3,500-range. Prices have now fallen back below $9,500 in the span of a month, taking back some, but certainly not all, of what speculators made in the last rally.
Something many Americans are confused about is, whether bitcoin is a currency, or an asset. For tax purposes, the IRS is treating bitcoin like an asset. Laura Saunders reports for the WSJ:
According to an IRS spokesman, there is no explicit requirement that many cryptocurrency sales be reported to the agency by third parties. Sales of stock shares must generally be reported on Form 1099-B to the IRS by the brokerage firm.
Among the possible taxes: If an investor sells a cryptocurrency after holding it longer than a year, the profits are typically long-term capital gains.
The tax rate is 0%, 15%, or 20%, plus a 3.8% surtax in some cases, depending on the owner’s total income.
Bitcoin prices have proven to be extremely volatile, and bitcoin should probably be avoided by any investor seeking to minimize risk in a portfolio. I don’t see much value in the crypto-currency, but I have written regularly that there is merit to the underlying blockchain technology that runs bitcoin.
E.J. Smith - Your Survival Guy
Latest posts by E.J. Smith - Your Survival Guy (see all)
- Are $2,000 Checks Going to Rebuild NYC? - January 15, 2021
- The Fed is Sacrificing Retirees to Save the Banks - January 15, 2021
- How Are You Doing on a Local Level? - January 14, 2021
- February RAGE Gauge: Americans Focusing on What’s In Front of Them - January 14, 2021
- There’s Always a Way Forward for Americans Like YOU - January 13, 2021