Cryptocurrency Taxes - 4 Ways How to Avoid it
Bitcoin is the first cryptocurrency and the first official application of blockchain technology as well. Both of them have been able to make great waves in currency spaces and fintech industry, which is why many other cryptocurrencies keep coming out over the past decade, hoping to be able to follow the same pattern as bitcoin. Although up to this day, none seem to have surpassed bitcoin’s success, most of the other cryptocurrencies that came after it was able to follow bitcoin’s pattern of being a decentralized, yet secure digital currency solution, which made cryptos extremely popular, thereby, catching the attention of the authorities. With the ever-increasing popularity came the rise of centralized exchanges that made governments even more enthusiastic to put their hands to cryptos. While their opinions vary, they all agree on one thing. Cryptos have to be taxed. While this is a complex subject, one thing is certain, many countries now tax cryptocurrencies as property, a fancy way of saying that it’s taxed like stocks. This means that if you earn capital gains from cryptocurrencies, then you have to pay taxes. For example, if you buy bitcoin and hold it for a year before selling it, then you have to pay long-term capital gains. So, are there ways how to avoid cryptocurrency taxes? Yes, there are, and here are some of them. Note that some of these may not be applicable to other countries. 1. Buy Cryptos in your IRA If you are an American citizen, perhaps one of the easiest ways to avoid taxes on your crypto investments is to buy them inside of an IRA, 401-k, or any