What are the tax implications of rolling over a 401k into a digital asset like Bitcoin?

1 answers

• Sheryl Faith PajoSep 18, 2022 · 3 years ago
  Rolling over a 401k into a digital asset like Bitcoin can have tax implications. The IRS treats Bitcoin as property, so any gains or losses from the transfer may be subject to capital gains tax. If you sell the Bitcoin within a year, the gains will be taxed at your ordinary income tax rate. However, if you hold it for more than a year, the gains may qualify for the lower long-term capital gains tax rates. It's important to consult with a tax professional to understand the specific reporting requirements and potential tax implications based on your individual situation.
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