TAX Question About Bitcoin

Feb 23, 2021 3 Comments

Can any tax expert helps with my question here:

1. I have some Bitcoin I mined a few years back. Recently I transferred them to Coinbase from a hardware wallet. If I sell, will it be considered short term or long term? How do IRS or Coinbase know I have hold them for a very long time?

2. If I buy some more BTC and later try to sell, how do I choose to sell the BTC I’ve been holding for a long time so I don’t get short term capital tax? When selling a part of all the BTC I have, seems there’s no way of specifying which “batch” of BTC I’m selling.

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TOP 3 Comments
  • Microsoft / HR
    JasonZande

    Go to company page Microsoft HR

    PRE
    Amazon
    JasonZande
    Long term. They don't know, you can easily say someone gave them to you and not pay any tax
    Feb 26, 2021 0
  • PayPal
    FuzzyLion

    Go to company page PayPal

    FuzzyLion
    PM me and I’ll refer you to a Tax Expert on crypto :)
    Feb 23, 2021 0
  • New
    🥜tc🥜

    New

    🥜tc🥜
    I am not accountant but here’s how I understand it.

    #1 if it truly is a long term investment then it sounds like long term capital gains. Do you have enough documentation to prove that it wasn’t a short term trade? It really is only an issue if you get audited.

    #2 my accountant basically told me I have to use tracking software. There are a few that connect with major exchanges. There are a few of these and I believe they will let you set LIFO or FIFO rules (and others).
    Feb 23, 2021 0