PSA: Yet another reason to buy and just hold

So I think like many others here, cryptocurrency was my first investment. I started in May 2017 and it's been quite an unexpected and wild right. I made a lot of rookie mistakes along the way and a lot of veteran traders have helped with all kinds of advice, but I think one thing that nobody ever really warned me about in the last year is about the implications that selling/trading will have on your taxes. I have a horrendous tax bill in front of me right now courtesy of bitcoin.tax because I made 1000+ little buys/sells on GDAX, Bittrex, and Coinbase — short-term trades that were slightly profitable, but were frankly mostly for fun.

Little did I know that every transaction, trade, and sale is a taxable event. Do not invest in a shitcoin unless you buy and hold it. Unless you're extremely confident about a shitcoin and you want to hold it for a year+ without any day-trading, then I really advise against buying it. Otherwise, you're paying short-term capital gains tax on what the IRS classifies as property.

Buy ETH, hold ETH for a year+, and you'll pay ~half of what you'd pay in taxes if you panic sold or day-traded, thanks to long-term capital gains. Hell, if you make less than 35k per year, then you'll pay NO taxes

Anyways, I hope I can help some other newbies to this space who won't have to deal with this massive headache of a tax report

Advertisements