Book Now Available

Get Your Financial Fix! Subscribe For Our Latest Planning Tips.

Tax on Cryptocurrency: What You Need to Know

What is cryptocurrency'

The process of buying cryptocurrency is still somewhat unclear for most of us. It’s not a stock, a bond, or really any type of traditional investment. Unlike previous fads that were popular with investors, buying cryptocurrency is fundamentally different. It is different because you are investing in the currency itself instead of securities that change depending on the value of currency. In essence, it's just a digital form of currency trading without a traditional market.

How do I get it'

For most people in the U.S. interested in investing in cryptocurrency, Coinbase would be the easiest option. There you can purchase cryptocurrencies such as Bitcoin, Ethereum, or Litecoin. Coinbase is the most widely used and currently the safest way to buy and sell. It also has a very simple interface and has a large supply for quick exchanges. Other platforms have much lower supply so a sale or purchase could take longer not to mention with higher fees and less security associated with it. After verifying your account, you can easily buy a cryptocurrency with credit or debit cards, U.S. bank accounts, or wire transfers of funds- but check with your bank or card company to be sure.

Cryptocurrency transactions are not anonymous as some may think, and the identity of the currency owner can be traced back to a real-world identity. Some think that because you may not be prompted for personal information to exchange, it is safer, and you will not incur taxes. However, the opposite is true, since every computer has a personal IP address, you are no more anonymous than running a credit card at a store.

But be warned, it is not treated as currency like the U.S. dollar; meaning the IRS levies taxes on cryptocurrencies just like they do for capital assets like stocks, bonds, gold and real estate, and thus it is subject to short and long-term capital gains when held for a period of time.

How is it taxed'

If cryptocurrency is being traded like a dollar in any way, whether it be trading it for another cryptocurrency (after calculating the current fair market value in USD) or using it to directly buy goods or services, these are taxable events and you need to record this transaction as taxable income as well as sales tax if applicable. Capital gains tax is also applied if traders have invested in cryptocurrency speculatively with the express purpose of making gains. Most nations split these capital gains taxes into short and long-term gain categories depending on various criteria.

Like individuals and companies are taxed differently for income and wages, the same is true for cryptocurrency. Companies are taxed based on enterprise-grade operations that are large and deal with a relatively large amount of cryptocurrency.

The bottom line'

We are not questioning the validity of cryptocurrencies as a form of short or long-term investment, only informing you that regardless of the intended use you need to understand how to comply with and pay the IRS if you own or use cryptocurrency until the tax code changes.

Free eBook

Property Done Properly

Learn how real estate fits into your overall wealth plan.

Investment Advisory Services are offered through Crafted Finance, LLC, a registered investment adviser. Please remember that securities cannot be purchased, sold or traded via e-mail or voice message system. This advertisement and any documents, files or previous advertisements may contain information that is confidential or legally privileged.  If you are not the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution, or any action or omission of this transmission is strictly prohibited.  If you have received this advertisement in error, please immediately notify the sender by telephone at (650) 336-0598 or return and delete the original advertisements and its attachments without reading or saving in any manner.

Share This Blog Post:

Kristin Harad

Marketing Coach

Step right up and meet Kristin Harad, the Marketing Coach wizard! Guiding businesses through the intricate maze of marketing, Kristin combines her smarts, pizzazz, and a hefty portfolio of wins to show she’s the real deal. Ever wonder what makes a brand pop and a strategy rock? Kristin’s your answer, lighting up the marketing world and turning potential into prowess.

Boasting three decades in the marketing arena, Kristin’s more than just a seasoned pro – she’s a beacon. Whether she’s spotting the next big trend or identifying a golden opportunity, she’s always got her finger on the pulse. And the cherry on top? Her rock-solid commitment to catapulting her clients right to the top of the business game. Dive into the marketing world with Kristin, and watch magic happen!

Jon Fogg

Content Creator

Jon Fogg is a dynamic and innovative content creator who has been making waves in the digital realm. With a passion for creativity and a flair for storytelling, Jon has captivated the financial world through his engaging and diverse content.

When he’s is not working on an SEO blog or case study, you’ll find him enjoying local art galleries or a phenomenal read. Friends and colleagues often commend him for his clear enthusiasm and dedication, which is evident in every project he undertakes. 

Kingston Hollman MBA

Compliance

Meet Kingston Hollman, the compliance guru everyone’s been talking about. With a sharp mind for regulatory ins and outs, Kingston is all about keeping businesses on the straight and narrow. That’s why he’s a go-to in the compliance world!

Sporting an MBA under his belt, Kingston’s not just about book smarts. He knows the fine dance between business strategy and staying in line with the rules. And guess what? He’s mastered it. Ensuring companies sail smoothly through the often-stormy waters of compliance is his game.

From the get-go, Kingston’s been crafting top-tier compliance programs, tailored just right for all sorts of industries. It’s his eye for detail and that knack for spotting the little things that make him stand out. He doesn’t just set up a system; he fosters a whole vibe of staying compliant, making sure everyone’s on board.

Jessica Martineau

Client Operations Manager

Jessica is a seasoned professional with a diverse background, bringing a decade of expertise across multiple industries. A proud graduate of SPU, her journey in the professional world is marked by significant accomplishments.

With nearly eight years dedicated to managing projects in the graphics and built environment sectors, Jessica has honed her skills as a meticulous Project Manager. This tenure has instilled in her a knack for thriving within organized structures while fostering robust client relationships, a hallmark of her professional ethos.

Her experience in the Finance industry spans almost a decade, where she has held pivotal roles as Lead Client Operations Manager and Director of Operations. Notably, her FINRA SIE Certification stands as a testament to her commitment to excellence.

Jessica’s strengths lie in cultivating enduring client connections, fueled by her passion for delivering thorough solutions. She finds joy in understanding and engaging with her colleagues, nurturing a cohesive work culture.

As a Pacific Northwest native, Jessica enjoys hiking, camping, and skiing. She loves reading, attending live music, plays, and comedy shows. Always a foodie, she delights in discovering new restaurants and revisiting old favorites, especially if there is a water view.

Most importantly, Jessica’s world revolves around her family—her amazing husband, Lee, and their two great kids. They are her inspiration and the anchor to her life outside of work.

Dionne Kelly

Executive Assistant

Let’s dive into the world of Dionne Kelly! Born in St. Kitts and with her roots deep in Barbados, Dionne’s been globe-trotting from her island homes to Canada, the USA, and Belize. Got a love for tropical spots? So does Dionne. Her passport’s got stamps that tell tales of sun, sea, and a bunch of awesome adventures.

Now, when it comes to her profession, Dionne’s the real deal. Over 20 years in the game as an Executive Assistant, she’s been the secret ingredient for bigwig C-suite execs. Think of a challenge, and Dionne’s likely tackled it head-on with her unbeatable organizational skills and eagle eye for detail. 

Oh, and did we mention she’s a foodie? Dionne’s taste buds have danced across diverse culinary landscapes, adding a sprinkle of global flavor to her persona. In the world of executive support, she’s a powerhouse, always two steps ahead and ready to make things happen. 

Joe Wride CFP®

Founder & CEO

Meet Joe Wride, the president and founder of Crafted Finance. With a knack for pension and investment management, insurance, and financial planning, Joe’s all about offering top-notch services without breaking the bank. That’s why he started Crafted Finance!

A proud Finance major from Washington State University, Joe’s got the credentials to back it up as a Chartered Life Underwriter and CERTIFIED FINANCIAL PLANNER™ Professional. Since 2009, he’s been helping individuals, families, and pension plans make sense of their finances. Joe’s even on the board of the Financial Planning Association’s Puget Sound chapter. Check out his LinkedIn profile here.

Joe gets that everyone’s got their own money story. That’s why he’s crafted a unique process to help folks of all stripes manage their finances, whether they’re flying solo, raising a family, or running a company. He’s all about learning and growing to make sure his guidance is just the right fit for his clients.

When he’s not crunching numbers, you’ll find Joe enjoying the Seattle life. He’s into skateboarding at Alki beach, biking, golfing, snowboarding, hiking, and camping. Sports fan? You bet! Joe’s a die-hard supporter of the Cougars, Mariners, Seahawks, and Sonics. But what really matters to him is family time with his wife Jessica, daughter Ocean, and dog Kanga. Joe’s excited to welcome more kiddos into their home through foster care and adoption in the future.

Download for Free

Property Is Power.

Let us know which email address to send this Free eBook to down below:

Please enable JavaScript in your browser to complete this form.
Name
This best describes my experiance in real estate investing:

Get Your Financial Fix!

Subscribe So You Don’t Miss Our Latest Planning Tips.

Search Site