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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
Accelerated cost recovery system (ACRS)
A statutory method of depreciation allowing accelerated rates for most types of property used in business and income-producing activities during the years 1981 through 1986. It has been superseded by the modified accelerated cost recovery system (MACRS) for assets placed in service after 1986.
