Bitcoin Taxation

Bitcoin taxation refers to how governments treat Bitcoin and other cryptocurrencies for tax purposes. In many countries, Bitcoin is considered property, not currency. This means that when you sell or trade Bitcoin, any profit (capital gain) is subject to tax. If you hold Bitcoin for over a year, you may benefit from lower long-term capital gains rates. Using Bitcoin for purchases can also trigger tax implications, as the value must be reported. It’s essential to keep records of transactions to accurately report gains or losses when filing taxes. Each jurisdiction may have specific rules, so it’s wise to consult a tax professional.