From Nasdaq

April 23, 2025 11:00:00 am:

The rise of cryptocurrency from obscurity to mainstream appeal has caught the attention of tax agencies worldwide, including the IRS. Crypto investors must now be aware of their tax liabilities, as mistakes can lead to audits and penalties. States also have their own rules on cryptocurrency taxation, adding an additional layer of complexity.

Calculating capital gains and losses on crypto transactions can be challenging, especially with frequent trades. Common errors include incorrect cost basis calculations, improper lot accounting, and not including transaction fees. Failing to report all taxable events, such as selling crypto for fiat currency, trading one cryptocurrency for another, or using crypto to purchase goods, can lead to costly tax blunders.

Crypto investors need to be diligent in tracking their transactions and understanding the tax implications of various activities, as even receiving crypto as income or mining cryptocurrency can trigger taxable events. Staking rewards and trading one cryptocurrency for another are also considered taxable events, making it crucial to report all income accurately to avoid penalties and audits.

Read more at Nasdaq: Crypto Investors: Avoid 3 Easily Missed Tax Mistakes Next Year