For the savvy taxpayer, there is a legal way to reduce taxes to zero on thousands of crypto profits. Taxes on Crypto.com transactions. Short term capital gains tax brackets (equal to your income tax rates) Here are the federal income tax brackets in the United States for the 2020 tax year. In the U.S., cryptocurrencies like bitcoin are treated as property for tax purposes.. Just like other forms of property like stocks, bonds, and real-estate, you incur capital gains and capital losses on your cryptocurrency investments when you sell, trade, or otherwise dispose of your crypto. The Reddit user, named Thoway, claimed to have got a tax bill from the United States tax agency, commonly known as the IRS. Though the core development team is always working on SAFEMARS it is the community who can guarantee its success. The IRS has begun sending out another round of crypto tax warning letters (dated August 14, 2020) to US taxpayers according to several posts on Reddit and other social media. ‍The Basics of Crypto Taxes. How You Can Get The 0% Tax Rate For Crypto. Coinbase reporting (1099-K & B), subpoenas and 1040 schedule 1 are ways IRS knows you ow crypto taxes. Similarly, you may not incur taxes if you take out a crypto loan provided that the collateral is not traded or exchanged. Reddit Roasts the IRS: Have America’s Tax Collectors ‘Gone Crypto Fishing’? Crypto taxes are based on a 2014 IRS ruling that determined cryptocurrency should be treated as a capital asset (like stocks or bonds), rather than a currency (like dollars or euros). Taxes, in and of themselves, can be complex, and throwing your crypto gains on top of it makes things even more challenging. People who cashed out during the boom period last year inadvertently racked up tax bills to the tune of thousands of dollars, as one Reddit user, who claims to have received an IRS tax demand of around $50,000. Note that this is the same as your ordinary income tax rate. Crypto.com is required to provide you with 1099-K form for informational purposes.Your buy, sell and exchange activities on our platform are subject to reporting if the gross proceeds from these transactions meet or exceed your state’s thresholds. For most states, the threshold is set by the IRS at $20,000 USD and 200 … Here are some practical tips we’ve discovered that allows you to pay no taxes on your cryptocurrency gains. Depending on the nature of how you are using Crypto.com, your tax implications will vary. However, that doesn’t mean that there aren’t ways around paying taxes on your Bitcoin gains. On Telegram, Facebook, Instagram, TikTok, Reddit and other social media channels, our awesome community is spreading the word about us. In a juicy little chunk of news from the Redditsphere, a user claiming to be a former IRS employee has called the agency’s new crypto compliance letters “broad and … What is the 1099-K form and why did I receive one? You should report crypto taxes whether IRS knows about it or not. Converting fiat currency into cryptocurrency to hold in a wallet does not incur taxes. These tax rates apply to short term capital gains (crypto or other capital assets held for less than 1 year).