As bitcoin (BTC) approaches its all-time high, it's important to keep a few things in mind to stay out of IRS tax troubles. Here are the top six points you should remember:
1. Cashing out BTC is a taxable event: According to IRS Notice 2014-21, the IRS treats BTC as property. So, when you sell BTC into cash, it results in a taxable event. For example, if you bought 1 BTC for $10,000 a few years ago and sold it for $50,000 in 2024, you have a taxable gain of $40,000 ($50,000 - $10,000).
