02-11-2021, 09:52 AM
Hold crypto for over 1 year = long-term capital gains = 0% tax under if $40,000
<!-- SC_OFF --><div class="md"><h1>Just a public service announcement.</h1> <p><strong>AMERICAN TAX LAWS</strong></p> <p>If you hold your crypto for over a year and sell it after that time, its considered a <strong>LONG TERM INVESTMENT.</strong></p> <p>You do not pay the same tax rates on it. It could be as low as 0% tax rate.</p> <p>​</p> <p><a href="https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates">https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates</a></p> <h2>What is long-term capital gains tax?</h2> <p>Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.</p> <h2>EXAMPLE</h2> <h2>2020 Long-term capital gains tax rates</h2> <p><strong>Single filers</strong></p> <p>Tax rate .... Your income</p> <p>0% ... $0 to $40,000</p> <p>15% ... $40,001 to $441,450</p> <p>20% ... $441,451 or more</p> <p>Short-term capital gains are taxed as ordinary income according to <a href="https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/">federal income tax brackets</a>.</p> <p>​</p> <p><a href="https://www.irs.gov/taxtopics/tc409">https://www.irs.gov/taxtopics/tc409</a></p> <h2>Capital Gain Tax Rates</h2> <p>The tax rate on most net capital gain is no higher than <strong>15%</strong> for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $80,000.</p> <p>A capital gain rate of <strong>15%</strong> applies if your taxable income is $80,000 or more but less than</p> <p>$441,450 for single;</p> <p>$496,600 for married filing jointly or qualifying widow(er);</p> <p>$469,050 for head of household, or</p> <p>$248,300 for married filing separately.</p> <p>However, a net capital gain tax rate of <strong>20%</strong> applies to the extent that your taxable income exceeds the thresholds set for the <strong>15%</strong> capital gain rate.</p> <p><strong>Note:</strong> Net short-term capital gains are subject to taxation as ordinary income at graduated tax rates.</p> <p>​</p> <p><a href="https://www.cpajournal.com/2019/01/24/the-taxation-of-cryptocurrency/">https://www.cpajournal.com/2019/01/24/the-taxation-of-cryptocurrency/</a></p> <h2>IRS Treatment of Cryptocurrency</h2> <p>The IRS addressed the taxation of cryptocurrency transactions in Notice 2014-21, which provides that cryptocurrency is treated as property for federal tax purposes. Therefore, general tax principles that apply to property transactions must be applied to exchanges of cryptocurrencies as well. Notice 2014-21 holds that taxpayers must recognize gain or loss on the exchange of cryptocurrency for cash or for other property. Accordingly, gain or loss is recognized every time that cryptocurrency is sold or used to purchase goods or services. How the gain or loss is recognized depends largely on the type of transaction conducted and the length of time the position was held.</p> <h2>Settled for cash.</h2> <p>Cryptocurrency gains from trading coins held as capital assets are treated as investment income by the IRS, and the same capital gains rules apply. A taxpayer who sells a coin position for cash must report a capital gain on Form 8949. A coin position held for one year or less is considered a short-term capital gain, taxed at ordinary tax rates; a position held for more than one year is considered a long-term capital gain.</p> <p>​</p> <p>​</p> <p>I will just leave this here.....</p> <p><strong>Tax his land, tax his wage, Tax his bed in which he lays.</strong></p> <p><strong>Tax his tractor, tax his mule, Teach him taxes is the rule.</strong></p> <p><strong>Tax his cow, tax his goat, Tax his pants, tax his coat.</strong></p> <p><strong>Tax his ties, tax his shirts, Tax his work, tax his dirt.</strong></p> <p><strong>Tax his chew, tax his smoke, Teach him taxes are no joke.</strong></p> <p><strong>Tax his car, tax his grass, Tax the roads he must pass.</strong></p> <p><strong>Tax his food, tax his drink, Tax him if he tries to think.</strong></p> <p><strong>Tax his sodas, tax his beers, If he cries, tax his tears.</strong></p> <p><strong>Tax his bills, tax his gas, Tax his notes, tax his cash.</strong></p> <p><strong>Tax him good and let him know That after taxes, he has no dough.</strong></p> <p><strong>If he hollers, tax him more, Tax him until he’s good and sore.</strong></p> <p><strong>Tax his coffin, tax his grave, Tax the sod in which he lays.</strong></p> <p><strong>Put these words upon his tomb, "Taxes drove me to my doom!"</strong></p> <p><strong>And when he’s gone, we won’t relax, We’ll still be after the inheritance tax.?</strong></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Lisfin"> /u/Lisfin </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/lh66wh/hold_crypto_for_over_1_year_longterm_capital/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/lh66wh/hold_crypto_for_over_1_year_longterm_capital/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><h1>Just a public service announcement.</h1> <p><strong>AMERICAN TAX LAWS</strong></p> <p>If you hold your crypto for over a year and sell it after that time, its considered a <strong>LONG TERM INVESTMENT.</strong></p> <p>You do not pay the same tax rates on it. It could be as low as 0% tax rate.</p> <p>​</p> <p><a href="https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates">https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates</a></p> <h2>What is long-term capital gains tax?</h2> <p>Long-term capital gains tax is a tax on profits from the sale of an asset held for more than a year. The long-term capital gains tax rate is 0%, 15% or 20% depending on your taxable income and filing status. They are generally lower than short-term capital gains tax rates.</p> <h2>EXAMPLE</h2> <h2>2020 Long-term capital gains tax rates</h2> <p><strong>Single filers</strong></p> <p>Tax rate .... Your income</p> <p>0% ... $0 to $40,000</p> <p>15% ... $40,001 to $441,450</p> <p>20% ... $441,451 or more</p> <p>Short-term capital gains are taxed as ordinary income according to <a href="https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/">federal income tax brackets</a>.</p> <p>​</p> <p><a href="https://www.irs.gov/taxtopics/tc409">https://www.irs.gov/taxtopics/tc409</a></p> <h2>Capital Gain Tax Rates</h2> <p>The tax rate on most net capital gain is no higher than <strong>15%</strong> for most individuals. Some or all net capital gain may be taxed at 0% if your taxable income is less than $80,000.</p> <p>A capital gain rate of <strong>15%</strong> applies if your taxable income is $80,000 or more but less than</p> <p>$441,450 for single;</p> <p>$496,600 for married filing jointly or qualifying widow(er);</p> <p>$469,050 for head of household, or</p> <p>$248,300 for married filing separately.</p> <p>However, a net capital gain tax rate of <strong>20%</strong> applies to the extent that your taxable income exceeds the thresholds set for the <strong>15%</strong> capital gain rate.</p> <p><strong>Note:</strong> Net short-term capital gains are subject to taxation as ordinary income at graduated tax rates.</p> <p>​</p> <p><a href="https://www.cpajournal.com/2019/01/24/the-taxation-of-cryptocurrency/">https://www.cpajournal.com/2019/01/24/the-taxation-of-cryptocurrency/</a></p> <h2>IRS Treatment of Cryptocurrency</h2> <p>The IRS addressed the taxation of cryptocurrency transactions in Notice 2014-21, which provides that cryptocurrency is treated as property for federal tax purposes. Therefore, general tax principles that apply to property transactions must be applied to exchanges of cryptocurrencies as well. Notice 2014-21 holds that taxpayers must recognize gain or loss on the exchange of cryptocurrency for cash or for other property. Accordingly, gain or loss is recognized every time that cryptocurrency is sold or used to purchase goods or services. How the gain or loss is recognized depends largely on the type of transaction conducted and the length of time the position was held.</p> <h2>Settled for cash.</h2> <p>Cryptocurrency gains from trading coins held as capital assets are treated as investment income by the IRS, and the same capital gains rules apply. A taxpayer who sells a coin position for cash must report a capital gain on Form 8949. A coin position held for one year or less is considered a short-term capital gain, taxed at ordinary tax rates; a position held for more than one year is considered a long-term capital gain.</p> <p>​</p> <p>​</p> <p>I will just leave this here.....</p> <p><strong>Tax his land, tax his wage, Tax his bed in which he lays.</strong></p> <p><strong>Tax his tractor, tax his mule, Teach him taxes is the rule.</strong></p> <p><strong>Tax his cow, tax his goat, Tax his pants, tax his coat.</strong></p> <p><strong>Tax his ties, tax his shirts, Tax his work, tax his dirt.</strong></p> <p><strong>Tax his chew, tax his smoke, Teach him taxes are no joke.</strong></p> <p><strong>Tax his car, tax his grass, Tax the roads he must pass.</strong></p> <p><strong>Tax his food, tax his drink, Tax him if he tries to think.</strong></p> <p><strong>Tax his sodas, tax his beers, If he cries, tax his tears.</strong></p> <p><strong>Tax his bills, tax his gas, Tax his notes, tax his cash.</strong></p> <p><strong>Tax him good and let him know That after taxes, he has no dough.</strong></p> <p><strong>If he hollers, tax him more, Tax him until he’s good and sore.</strong></p> <p><strong>Tax his coffin, tax his grave, Tax the sod in which he lays.</strong></p> <p><strong>Put these words upon his tomb, "Taxes drove me to my doom!"</strong></p> <p><strong>And when he’s gone, we won’t relax, We’ll still be after the inheritance tax.?</strong></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Lisfin"> /u/Lisfin </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/lh66wh/hold_crypto_for_over_1_year_longterm_capital/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/lh66wh/hold_crypto_for_over_1_year_longterm_capital/">[comments]</a></span>Kind Regards R