Bitcoin rebounds to $40,000 after decline
The tax reporting deadline approaches and investors are trying to figure out how to treat cryptocurrencies on their taxes
Comerica Wealth Management CIO John Lynch discusses which sectors could drag down markets on 'The Claman Countdown.'
Bitcoin is back around $40,000, after dipping below that on Thursday.
The cryptocurrency has traded lower in three of the past four days.
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Crypto prices followed equity markets lower as Russia escalated its attacks on the southern and eastern parts of Ukraine.
Bitcoin is down more than 12% month-to-date and off more than 13% year-to-date.
The clock is ticking toward the tax reporting deadline of April 18.
Many investors are trying to figure out how to treat cryptocurrencies on their taxes.
The Internal Revenue Service is getting more serious about it.
An illustration of crytpocurrencies. (Photo Illustration by Chesnot/Getty Images / Getty Images)
According to the Pew Research Center, 16% of U.S. adults now say they have invested in, traded or otherwise used cryptocurrencies.
The 1040 tax form now includes a question on whether you've received, sold, exchanged or disposed of digital assets, according to Reuters.
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Tax experts recommend treating crypto like a stock holding. If you have held it long term, meaning over a year, profits from any sale are subject to the capital gains tax.
However, for short-term holdings of less than a year, gains from a sale are treated differently, like ordinary income, with the rate determined according to your tax bracket.
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The IRS has published answers to frequently asked questions about crypto.
Exchanges themselves often have helpful tax resources for users, such as Robinhood and Coinbase.