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Submitted By: someone
Answered: March 14, 2019 10:27 pm
Answered: March 14, 2019 10:27 pm
I put $500 into a cryptocurrency exchange in 2017 and withdrew $1,000 in 2018. How to I report this transaction?
The IRS treats bitcoin and other cryptocurrency transactions as property and not as currency. As such, you must figure gain on the transaction in the same way as with any other type of property. The IRS posted guidance (https://www.irs.gov/pub/irs-drop/n-14-21.pdf) on this matter several years ago, but may revisit the topic, so stay alert.
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Tax Glossary
Estimated tax
Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.
