**Greetings**
Crypto taxation is complicated and rapid field in a sense that how speedly it is going to be evolved by also taking in consideration digital assets as property for taxation purposes.This classification means that crypto transactions are subjected to capital gains taxation and income taxation just like traditional investments.
[Pixabay](https://pixabay.com/illustrations/bitcoin-cryptocurrency-currency-2136339/)
**Taxable events**
There are multiple crypto transactions that triggers taxable events in which there are;
• Event of selling crypto just for the purpose of dispose of crypto for fiat currency or other assets which are incurring capital gains tax.
• Event to trade crypto in a way to exchange one crypto for another which is a taxable event and it is also subjected to capital gains tax.
• To utilities crypto for goods and services in a way to spend crypto for purchasing goods or services incurring capital gains tax.
• To earn crypto by gaining crypto as source of income like by the process of mining, staking or airdrops which is also subjected to income tax.
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There are tax rates applied to crypto transactions depending at taxpayer income level and length of time for which they are holding assets.
• In short term capital gains when you are holding crypto for less than one year then gains are taxed just like ordinary income with rates that range from 10 to 37 percent.
• In long term capital gains when you are holding crypto for more than one year then it means that this is going to qualify for less tax rates that have a range from 0 to 20 percent.
[Pixabay](https://pixabay.com/illustrations/ethereum-cryptocurrency-blockchain-6842405/)
**Reporting crypto taxes**
To report crypto taxation it is most important to keep precise records so there are some terms important to remember in which there are;
• Cost basis which is original purchase price of cryptocurrency.
• Proceeds which is value received while dispose of crypto.
• Gain or loss which is difference among proceeds and cost basis.
Crypto exchanges needs for reporting transactions to IRS and to start in 2025 so that they will issue form 1099-DA for purpose of reporting gains and losses.You will be required for reporting crypto income and capital gains at following;
• Form 8949 is available to report capital gains and losses through crypto sales and trades.
• Schedule 1 is available to report ordinary income from crypto like stake rewards.
• Schedule C is important to report business income through crypto like mining or operating a node.
[Pixabay](https://pixabay.com/illustrations/blue-whale-nft-crypto-blockchain-7110975/)
**Minimizing crypto taxes**
There are strategies for reducing crypto tax liability which include;
• To holding crypto for long term through qualifying for less long term capital gains tax rates.
• To offset gains with losses so that tax liability may be minimised.
• To donate crypto to charity which may provide tax advantages.
There are different practices for crypto tax compliance which are following;
• Keeping true records for the purpose of tracking all crypto transactions in which there are dates, amounts as well as values.
• To make a consultation with a tax professional for purpose of seeking guidance from tax expert which is familiar with crypto tax system.
• Staying well informed with alternating tax laws and regulations which surrounds crypto.
In conclusion I have discussed about crypto taxation, different events,short and long term capital gains, minimizing crypto taxes and about best practices and compliance....
**Have a blessed day**
