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Cryptocurrency traders are facing tax consequences due to wash sale rules, with potential massive tax bills even on losses. The IRS can easily track memecoin trade history. Transitioning from long-term to active trading can lead to tax implications, especially in Canada where gains are treated as income. Mismanagement of profits in crypto trading can result in significant losses. Traders may face audits for unreported gains, highlighting the need for accurate tax reporting.
[Gets audited] IRS agent: "It says here you bought this coin and made $60k on it. You didn't report taxes on that." Me: "What coin are you talking about?" IRS agent: "..." Me: "Go ahead. Just say what the name of the coin is"
My understanding of how crypto taxes work is that if you take just enough profits so that the rest is "house money," you can end up losing a ton of money. Here's the math: You buy some crypto for $100. It goes up 10x and you sell just enough to get your $100 back. Pure upside… https://t.co/dn00RhBS2U
If you have gone from mid to long-term investor in projects with real value to full out degen trader for most of the year just consider the tax consequences. Ain’t pretty. In Canada, this means that any type of gain will be treated as income not ‘capital gains’. Easy way to get…