Imagine cryptocurrency as digital money like Bitcoin or Ethereum. The government (IRS) wants you to pay taxes on it, just like you do with toys or anything else you sell! If you sell crypto for more than you bought it, you have to pay taxes on the profit. But, if you lose money, you might get some of that money back on your taxes.
- Selling crypto is like selling a toy - you pay taxes on the profit!
- If you sell crypto for less than you bought it, you may get some of the loss back.
- The IRS is checking to see if everyone is paying the right taxes on their crypto.
| Thing | Info |
|---|---|
| Tax on profits | Depends on how long you owned the crypto |
| Tax on losses | Up to $3000 can be subtracted from your taxes. |
| IRS forms | Form 1040, Schedule D, and Form 8949 help with crypto taxes. |
