Are bitcoin profits taxable?
It is very important to understand are bitcoin profits taxable?
The short answer is, probably, yes. Most tax authorities where bitcoin is legal treat it as an asset, much like gold or a collectible. This means that you will have to pay taxes on any gains you make if you sell it, and it important to keep track of how much you paid for your bitcoin.
There is no global tax agency, and each country decides on how to tax cryptos like bitcoin. In many European nation, the taxes on bitcoin and other tokens are low, especially for someone who isn't trading tokens actively.
In the USA, the tax laws are stricter. The IRS makes no distinction between a commercial bitcoin or crypto operation, and a small holder or trader.
If you are subject to US tax laws, it is a good idea to work with a US-based crypto exchange that will keep track of all the needed information, and also tell your accountant that you have crypto holdings.
In most cases taxpayers will have to pay taxes on crypto sales that result in a profit, which are called capital gains. Be sure to talk to your tax professional about how to best manage these taxes, as there are legal strategies you can use to lower your taxes.
