How I Made Extra Money by Paying Taxes on My Crypto Assets

The Importance of Cryptocurrency Legalization and Taxation

Why do You Have to Pay Taxes on Crypto?

  • Letter 6173 — A letter stating explicitly about non-payment of taxes on operations with virtual currency, which implies serious punishment and fines;
  • Letter 6174 — An information letter that does not require an answer, but reminds the individual that it is possible that he or she has an account with virtual currency; the person may not know about the fulfillment of the requirements for it;
  • Letter 6174a — A letter stating that the taxpayer reported foreign exchange transactions, but with a violation of the reporting procedure (for example, an error in the form of income: on capital gains or on entrepreneurial activity).
  • Letter CP2000 — If you received this letter, it means that the IRS thinks you owe them money and suspects you of crypto tax evasion. It gives the recipients 30 days to reply.

Saving Extra Money on Crypto Taxes

Employ the Tax-Loss Harvesting Method

Be a Long-Term Investor

Donating Your Crypto or Giving It as a Gift

Hire a Tax Professional

Using a Reliable Crypto Tax Software

Turn Crypto Losses into Tax Gains with ZenLedger

  1. Open the tool — pick the “Tax Loss Harvesting” option and initiate the analysis of transactions;
  2. Review the results — open the Google Sheet in a new browser tab that contains unrealized losses;
  3. Realize the losses — sell crypto in a spreadsheet, thus realizing and harvesting losses;
  4. Redeem assets — redeem crypto via your chosen strategy to maintain asset allocation.

Final Word

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ZenLedger

ZenLedger

Simplifying DeFi and cryptocurrency taxes for investors & tax professionals. www.zenledger.io