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With the end of the year approaching many traders and investors are getting prepared for another year of tax reporting. Below are some of the basics on how crypto is taxed and what is considered taxable.
In 2014 the IRS put out a notice that classified cryptocurrency as “property” instead of a currency, therefore crypto is treated the same way as stocks, bonds, and other assets.
Refers to gains from crypto assets which have been held for longer than 365 days. Investors who hold for longer than a year benefit more than short term investors by paying lower crypto tax fees.
Refers to gains from crypto assets which have been held for less than 365 days. Traders and investors who hold cryptos for less than a year are not given a tax break, and these gains are taxed similar to taxes on ordinary income.
This is not a complete guide, and one should seek guidance from a crypto tax advisor before filing crypto taxes to ensure that all areas of filing have been covered.
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Bitcoin has broken the $50k level that we discussed in last week’s article and now the next important level to reclaim would be $53k. At the time of writing Bitcoin is at about $49k and price seems to be retesting the $50k-ish daily level before another attempt to the upside. If this area does not hold, I would expect anywhere between $44k – $46k to hold up as support. I would be willing to put my bull hat on if Bitcoin could put in a daily candle close over the $53k level in the coming days.
Bitcoin support at $50k holds up and then we look at $53k as the next resistance to reclaim.
Bitcoin does not hold support at $50k, and then we look for the $44k – $46k daily level to hold. If this level fails, we target the weekly MUST HOLD level of $40.6k
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Ethereum seems to still be in a battle with the $4k level. At the time of writing $ETH is about $3900 and seems to be waiting on Bitcoin to decide its fate. In my opinion the best move to make for trading $ETH would be to wait for a weekly close over the $4k level or to buy another test of the $3600 daily level.
Ethereum holds support at the $4k level on the weekly time frame and then pushes to reclaim $4.3k.
If the $4k level cannot be held as daily support, we should target the next support level below of $3.6k level.
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