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News Link • TAXES: Federal

Warning! The Crypto Tax Man Cometh

• by Mike Mish Shedlock

According to the Internal Revenue Service, anything purchased using a digital currency is liable to be taxed as a capital gain.

Do you have records when you bought and sold?

Sold includes trading Bitcoin for Altcoins or vice versa.

Both have huge Tax Consequences and fines.

What, Me Worry?

If you did anything like this: I just discovered that I owe the IRS $50k that I don't have, because I traded in cryptos, you are in serious financial trouble.

I make $47k a year at my job as an office assistant.

At the advice of my friends, I took most of my savings and bought 8 bitcoins back in early 2017 for about $7200. You can imagine how I felt when it went up. Around December 2017, I got caught up in the altcoins frenzy and sold most of my bitcoins (about $120k worth) to buy a bunch of different coins. I didn't know this back then but it looks like I owe income taxes on those trades, which adds up to about $50k if I add up state (California) and federal. But with the crash that happened recently, I added up my altcoins and I only have like $30k worth. I only have about $5k in other savings.

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