Own Crypto? Here’s How to Avoid Running Afoul of the IRS.
Investors in cryptocurrencies may be sitting on big profits. Bitcoin and Ethereum, the two largest cryptos, are up 100% and 470% this year, respectively. Solana, another major coin, is ahead 13,300%, while the “joke” token Dogecoin has gained 49,000%. While the profits may have enriched crypto owners, taxes may be coming due soon, and the situation isn’t clear-cut. The government taxes crypto-like any other investment—in other words, it’s considered an asset, like a stock, and not a currency. So, selling can incur significant capital-gains taxes, especially if you’ve owned coins for a year or less. And if you’ve earned interest by lending or “staking” tokens, that interest is taxable, just like interest from a bond or bank account.