With the market value of Bitcoin and other cryptocurrencies hitting new highs year after year, cryptocurrency is undoubtedly an important asset. If you hold multiple bitcoins in your hand, your personal wealth should not be underestimated. So the question is, do you need to pay taxes on cryptocurrency transactions or cloud mining for bitcoin? Many novices may not be very clear about this issue. In fact, the regulations of different countries are different.
Cloud mining for bitcoin - cryptocurrency transactions are not protected and tax-free
The law in China regulations does not support public Bitcoin transactions, or even mining and speculation. There is no law to protect Bitcoin transactions, and there is no need to pay taxes. In the future, if Bitcoin and cloud mining for bitcoin are defined as "a specific virtual commodity" or "network virtual property", the tax authorities may impose taxes on Bitcoin transactions with reference to the taxation rules for virtual currencies related to online games.
Cloud mining for bitcoin: apply general taxation principles for property transactions in the USA
Although the attitude towards cryptocurrency is still unclear, the comprehensive and detailed taxation in the United States can be said to be world-renowned. According to the current view of the US Internal Revenue Service (Bitcoin is considered property and the general tax principles that apply to property transactions apply to transactions using virtual currencies." This actually means that Bitcoin’s capital gains tax and profit from stocks. There is no difference in the capital gains tax mentioned.
Depending on the income level and the holding period of cloud mining for Bitcoin, capital gains have different tax rates. How much tax do you need to pay for Bitcoin transactions? Take a look at this complete guide to cryptocurrency trading.
Capital gains tax is divided into two categories, namely short-term and long-term. Short-term capital gains tax applies to the profit from the sale of assets held for less than one year. Long-term capital gains tax applies to the wealth held for more than one year. Long-term capital gains tax rates are 0%, 15%, and 20%, depending on income. Cloud mining for bitcoin - These tax rates are usually much lower than ordinary income tax rates.
In July 2019, a large number of currency users in the United States received a warning letter from the IRS, requesting to report their cryptocurrency transaction status and to pay taxes, interest, and fines correctly. If you fail to pay taxes in accordance with the regulations, you may face a fine from the IRS, or you may be sent to jail by the IRS, which has always been vigorous and vigorous.
It is said that the only certainty in life is death and taxation. This sentence is a well-known saying in the United States. Bitcoin and cloud mining for Bitcoin has nothing to do with tax avoidance. In a word, nobody dares to offend IRS in the USA. Keep in mind that if you are trading Bitcoin in the United States, you must not forget to declare taxes actively.