Are there any special considerations for California day traders when it comes to taxes on cryptocurrency trading?

1 answers

• abracadaabracadJan 28, 2023 · 3 years ago
  As a California day trader, it's important to understand the tax implications of your cryptocurrency trading activities. The California Franchise Tax Board considers cryptocurrencies as property, which means that any gains or losses from trading will be subject to capital gains tax. This tax is calculated based on the difference between the purchase price and the sale price of the cryptocurrency. If you hold the cryptocurrency for less than a year before selling, the gains will be considered short-term and taxed at your ordinary income tax rate. If you hold it for more than a year, the gains will be considered long-term and taxed at a lower rate. It's crucial to keep detailed records of your trades, including the date, purchase price, and sale price, to accurately report your gains or losses. It's also recommended to consult with a tax professional to ensure you are meeting all the necessary tax obligations as a California day trader.
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