With so much popularity of bitcoin worldwide, everyone always wants to know the USA’s take. It’s not only about bitcoin or blockchain technology; for any matter, the USA is always aggressive and the world’s leading country.
In this article, I will be sharing different facts and useful information on bitcoin in the USA. Starting from legality status to tax treatment, trading, bitcoin startups, exchanges, and more. Stay with me till the end; you will get some bonus tips on where you can spend your holiday with bitcoin in the USA.
How the USA Treats Bitcoin?
Although ten years have passed, many people are still confused about whether bitcoin is legal or not, Whether it is safe to use or trade. Now let us start with the legal status of bitcoin in the USA.
The Legality of Bitcoin in the USA
Bitcoin, along with some other cryptocurrencies, is legal in the USA. The Internal Revenue Services (IRS), the USA’s regulatory body, formally proposed the guidelines for the use of bitcoin and other digital currencies in the country in the year 2014. The IRS uses the term virtual currency for bitcoin and other cryptocurrencies. Recently, it has issued a new tax form for taxpayers who are engaged in any virtual currency transactions. Now let’s look at the tax treatment of bitcoin in the USA.
Tax Treatment of Bitcoin in the USA
According to the Internal Revenue Services (IRS, the USA’s federal tax authority), bitcoin is not a currency; it’s a property. And anybody who is involved in any crypto transactions like bitcoin or ether are liable to tax payments. The earnings from bitcoin or crypto transactions are subjected to capital gains tax. Now let’s take a closer look at the different taxable events of bitcoin.
- Sale or Exchange of Bitcoin
You are liable to capital gains tax for sale or exchange of bitcoin or any other crypto coins. The tax rates will be calculated on the basis of the term capital gains. For short term capital gains, the tax rate will be equal to income tax rates. For long term capital gain purposes, the tax rates will be reduced by some percentage.
- Tax on Bitcoin Mining
If you receive rewards more than $400 from bitcoin mining, you should report it to the IRS. Bitcoin mining is also taxable, but there are specific guidelines mentioned in the IRS website, check out if you are involved in bitcoin mining.
- Tax on Bitcoin Trading
Suppose you are involved in any type of bitcoin trading. In that case, whether you are a margin trader, derivatives trader, or whatever, you have to take all the transactions into account for tax purposes.
- Income Tax on Bitcoin
No matter which cryptocurrency do you earn, you will have to pay tax on your gross income. Now let’s take the example of bitcoin. All your incomes related to bitcoin transactions will be included in the total income, and the tax will be calculated based on income tax guidelines.
Recently in the year 2019, the IRS proposed a new tax form of virtual currency transactions. If you are a taxpayer of the USA and involved in bitcoin transactions, visit the official website of the IRS. Now let’s look at different bitcoin-based startups and exchanges in the USA.
Bitcoin Startups and Exchanges
There are many startups and exchanges in the USA. Blockfolio, BlockFi, CoinCircle, YellowCard are some of the bitcoin startups in the USA. Coinbase and Gemini are the top bitcoin exchanges in the USA. If you want to trade using a mobile app, you can check out the max your profit of 2020.
Conclusion
If you are planning your holidays and spend bitcoin on your bills, then you can visit San Francisco, New York, Brooklyn, Chicago, and many other cities. Hopefully, the article has provided you useful information on bitcoin in the USA.
