Best tax strategies for crypto as it becomes focus in election
Bitcoin (BTC-USD) is up more than 35% year to date, the crypto asset currently hovering below $60,000, and with big gains comes big tax responsibilities. Gordon Law Partner Andrew Gordon joins Wealth! to break down the best tax strategies for crypto investors and how the industry might change following the 2024 presidential election. "Although cryptocurrency can be considered very complex from a tax standpoint, at the most basic level it's taxed much the same as stocks or other securities. And so there are long-term and short-term capital gains, and you're taxed every time there's an exchange, a swap, or a sale. But what makes crypto unique is that you're not just taxed when you cash out to cash, but you're also taxed every time you convert from one crypto to another," Gordon explains. As the presidential election is under three months away, Gordon notes that politicians are speaking about crypto more than ever before: "It seems to mark a shift from regulation by enforcement, which we have seen for several years through agencies such as the SEC (Securities and Exchange Commission), but perhaps now a shift to politicians supporting and embracing crypto and implementing regulation and legislation to support to allow innovation to occur and to allow individuals to hold crypto and not become criminals." Crypto executives met with White House officials via video call last week to express their concerns about how the Biden administration and regulators have treated the industry. While the Republican Party has embraced cryptocurrency more than the Democratic Party, Gordon explains the issue is bipartisan. "What I hope will happen over time is that it becomes an issue that regardless of which side of the political front you're on, that you understand that the crypto tax side of things needs to change. With over 40% of Americans holding cryptocurrency, it's time that the tax gap be reduced by policies that allow individual investors to report crypto simply, easily, and also allow the IRS, the Treasury, to collect on taxes that are rightfully owed," he adds. For more expert insight and the latest market action, click here to watch this full episode of Wealth! This post was written by Melanie Riehl
