Cryptocurrency - help me understand please.

Crypto is a digital asset property, whatever the exchange amount, crypto holders pay taxes on movements twice;

• First, mining of or sale of, crypto
• second, sale of or gains from, crypto

Crypto owners “tax state found on their drivers license” matters in terms of taxes.

1. Day one crypto-owner mines/sold one coin at $50k.
   • Taxes on owners ordinary income
2. Day two crypto-owner later sells the coin for $52k. $2k capital gains.
   • Taxes on income of capital gains
3. Crypto-owner gains $50k of ordinary income & $2,000 of capital gains.
4. Factor tax state rates, configure taxes.

If you pay their cryptocurrency tax taxes incorrectly, jail for up to 5 years or six figure fines or both depending on judge/jury discretion and serious of matter

If you purchase crypto asset(s), you will not have a taxable event directly from that capital asset purchase until the asset is sold, or exchanged for another asset, or used to purchase a good or service. However, if you receive crypto from activities such as mining, staking, or lending, it is considered a taxable event for which you will pay the ordinary income tax rate.

 

Read Hudson Lee's Crypto for Beginners and stay away from "Opinion Pieces" or "Emotional, Knee Jerk, Responses". Also ask yourself how much you truly understand about the financial market and what drives it. If you don't understand the foundational pieces of Finance, especially world finance. Crypto is the enemy to uninformed minds that don't have a foundational understanding of the system itself. Kevin Peterson wrote Financial Intelligence the Beginners Guide to Understanding the Numbers. This book doesn't rely on the hype of podcast, opinion pieces, and finely crafted narratives that drive the populous. He relies on historical data and processes that have governed banking for hundreds of years. Crypto is "fashionable and cool" and the pretenders like to say they get it and that they've always "gotten it". That's a lie. Most people getting rich off of Crypto got in at the start or made their millions elsewhere. Do the work to understand it foundationally before moving on.