00:00Selling crypto for fiat, or trading one token for another, triggers a taxable event in most jurisdictions.
00:06These are the two transaction types most likely to create a reportable capital gain or loss.
00:12Because tax authorities like the IRS treat crypto-to-crypto swaps as a disposal of property, not a like-kind
00:18exchange,
00:19that exemption was closed for crypto after 2017 in the US.
00:231. Selling crypto for fiat currency, e.g. BTC to USD almost always taxable.
00:31Gain-slash-loss equals sale-price-minus-cost basis, taxed as short-term, ordinary income rates, up to 37%
00:39federally in the US,
00:40if held under 12 months, or long-term, 0-20%, if held longer.
00:462. Crypto-to-crypto trades, e.g. ETH for SOL equally taxable despite no fiat touching your bank.
00:53Many retail traders miss this, and it's the most common audit trigger due to under-reporting.
00:593. Using crypto to buy goods-slash-services, taxable as a disposal at fair market value on the transaction date,
01:07same as a sale.
01:094. Receiving crypto as income, staking rewards, mining, airdrops, payment for work taxable as ordinary income at fair market value
01:18when received,
01:19then subject to capital gains again upon later disposal.
01:225. Simply transferring crypto between your own wallets or buying crypto with fiat, not taxable events.
01:30No disposal occurs.
01:31The answer changes by context.
01:33US, UK, and most EU countries tax crypto-to-crypto swaps.
01:38But jurisdictions like Germany exempt gains on assets held over one year regardless of trade type, and countries like the
01:45UAE or Portugal, for individuals, pre-2023 rules aside, have historically offered more favorable or no capital gains treatment.
01:54High-frequency traders face far more taxable events than long-term holders, and tax treatment can also shift with new
02:02legislation.
02:02I'd flag that rules evolve yearly, so this isn't a fixed universal standard.
02:07Practical takeaway.
02:09Track cost basis and transaction dates for every trade, including crypto-to-crypto swaps.
02:15Using a crypto tax tool, e.g., Coinly, CoinTracker, and consult a local tax professional before year-end to confirm
02:23jurisdiction-specific treatment.
02:24Finally, remember that everything we discussed today is for educational purposes only and does not constitute financial advice.
02:32Good luck to everyone, and see you in the next video.
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