I bought a bitcoin for $950, now it is worth 700, do I pay taxes?

Question

Okay so Ive been reading online allot but im very confused.

Do you have to pay taxes every year even if you don't withdraw your investment?

So I bought 1 btc, the price goes down, do I have to report that I made a investment and that I lost money?

Or if I bought a bitcoin for $500, then it goes to $700, but I still want to hold onto it for 2 more years, do I have to continually report gains and losses every year? Wouldn't it just make sense to report when you withdraw?

Also, since I lost $250 so far, does that mean i get a deductable?

tro · Accepted Answer

like an investment you pay taxes on the profit you make from the sale

M W · Answer

You may post a gain or a loss upon transfer of assets. So until you sell it there is no need to worry.

? · Answer

you only pay tax if you gained money, you lost money, you don't pay tax on a loss. as long as you leave it invested you don't pay tax. if you sell it and make a profit, you pay tax.

Anonymous · Answer

you don't pay tax on losses, only on benefits, you may check bitcoin values daily

Slickterp · Answer

You have to sell it first.

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I bought a bitcoin for $950, now it is worth 700, do I pay taxes?

5 Answers