Are you involved in Cryptocurrency but you are unsure when you should treat it as revenue on your tax return? We are here to help. Here are a couple FAQs to help you this tax season.
1.) Should you report a transaction if someone with a service paid you in virtual currency?
Yes. You received property in exchange for performing services.
2.) Should you recognize a gain or loss if you paid someone with virtual currency for providing you with a service?
Yes. You have exchanged a capital asset for a service and you will have a gain or loss.
3.) How should you calculate your gain or loss when you sell virtual currency for real currency?
A gain or loss will be the difference between the adjusted basis in the virtual currency and the amount you received in exchange for the virtual currency. Remember you should report the gain or loss on your Federal income tax return in U.S. dollars.
For more Crypto FAQs, click the link below.
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