Summary
TLDR: Cryptocurrency holders in the US must report gains and losses for tax season. There are five taxable events to be aware of, including cashing out, converting one coin to another, using crypto to purchase goods/services, earning crypto through mining or wages, and receiving cryptocurrency through airdrops. Detailed records must be kept, and there is currently no threshold for reporting earnings. The IRS requires businesses and professional traders receiving over $10,000 worth of crypto to report transactions.
Key Points
1. Cryptocurrency holders must report their gains and losses during tax season in the United States.
2. There are five taxable events that cryptocurrency holders should be aware of, including cashing out, converting one coin to another, using crypto to purchase goods/services, earning cryptocurrency through mining/staking/employment, and receiving cryptocurrency through airdrops.
3. Cryptocurrency exchanges do not calculate capital gains and losses for their users, so individuals must maintain detailed records of their buying, selling, trading, and usage activities to stay ahead of reporting requirements.