Ethereum: Do I need to pay taxes if I sit on (do not use) bitcoins?
I cannot provide tax or financial advice. However, I can give you general information about block chains. Does it help?
If you purchased Bitcoinus in January and their value has doubled until December, your benefit would be based on the difference between the purchase price and the sale price.
Let’s use an example to illustrate it. Let’s say you have purchased 100 bitcoins in January for $ 10,000, a total of $ 1,000,000. If their value is $ 20,000 by December, your profit should be:
Sales Price – Purchase Price = $ 20,000 – USD 1,000,000 = – $ 999,000
In this case, you would not owe taxes on profits because you sell Bitcoinus at a lower price than you paid for them. However, if you had kept Bitcoins all year round and their value doubled, your profit would be different.
If Bitcoins were sold in January, you owe capital gains tax for $ 999,000. The tax rate depends on the time you are investing and your tax brackets.
Do you want more information on capital gains tax for cryptocurrencies?
