Crypto Tax Scenario Table ($25,000 Sale Proceeds vs $14,000 Cost Basis)
| Holding Period | Net Capital Gain | Tax Rate Type | Applicable Tax Rate | Estimated Tax Owed | Net Profit Retained |
|---|---|---|---|---|---|
| Short-Term (≤1 Year) | $11,000 | Ordinary Income Tax | 24.0% | $2,640 | $8,360 |
| Long-Term (>1 Year) | $11,000 | Preferential Cap Gains | 15.0% | $1,650 | $9,350 (Save $990) |
Frequently Asked Questions
Are cryptocurrency transactions taxable?
Yes! The IRS treats cryptocurrency as property. Selling crypto for cash, trading one cryptocurrency for another, or using crypto to buy goods triggers a taxable capital gains event.