Crypto Trader – Do I have to pay taxes?

Last Updated: 12 February 2024

Bitcoins have been around for about 10 years. Two years ago, the value rose imposingly. Thus, many investors want to profit from it in order to earn a lot of money. The number of trading platforms on which Bitcoins can not only be bought but also sold has increased rapidly.

However, investors should be prepared for the fact that there can be losses as well as profits. Moreover, investors should know that Bitcoins are not a currency.

How can one profit from Crypto Trader?

Step 1: Click on the link to go to Crypto Trader’s official website.
Step 2: Fill out the form to get a FREE licence to trade.
Step 3: Follow the instructions on the platform to profit from bitcoin fast!

How to pay tax on Bitcoins?

There are many investors who are looking for high profits by trading Bitcoins. This is also the reason why cryptocurrencies are increasingly becoming the focus of traders.

However, they are not considered legal tender in this country, so one can compare the profits that arise from trading bitcoins with profits from the sale of, for example, works of art. This has the advantage that no taxes have to be paid from this sale. This is also the case with Crypto Trader.

 

Crypto Trader - Do I have to pay taxes?

When are Bitcoins tax-free?

Two values come up:

1. the profit made on the sale of Bitcoins
2. the time the investor has owned them.

Important:

If the Bitcoins were in the possession of the investor for more than one year, no tax is due. The amount of the gain is not relevant. The profit also does not have to be listed in the tax return.

However, if the bitcoins are sold again within twelve months, profits can remain tax-free if the exemption limit of 600 euros is not exceeded. However, if the profit is above the 600 euros, the profit is taxed in full.

Information:

However, this limit of 600 euros does not only apply to bitcoins, but also to private sales transactions made within one year. For example, if you sell a work of art for 700 euros, you have exceeded the entire exemption limit. The amount of profit is not relevant here.

Holding period of Bitcoins

If an investor buys or sells Bitcoins more frequently, it is often not possible to determine the exact holding period. However, to ensure that the gains are nevertheless included in the tax return. the FIFO method should be applied.

This means that the Bitcoins that were bought first must be sold first.

Minimise losses

If the investor has suffered losses in cryptocurrency trading, he can minimise his tax burden. However, losses can only be offset against private sales transactions in the existing year.

The profit from the private sales transactions will decrease, but the tax burden will be less. However, losses can be carried forward to the next year without limitation in order to offset expected gains.

What are the taxes?

The investor’s profits are offset against the personal income tax rate. In addition, there is the solidarity surcharge and possibly church tax.

How are Bitcoins entered in the tax return?

On the relevant forms, there is an “Income” column in which it is indicated how many Bitcoins were sold in the year. In the following questions, it is indicated how long the investor had in his possession.

Author
  • Luke Handt

    Luke Handt is a seasoned cryptocurrency investor and advisor with over 7 years of experience in the blockchain and digital asset space. His passion for crypto began while studying computer science and economics at Stanford University in the early 2010s.

    Since 2016, Luke has been an active cryptocurrency trader, strategically investing in major coins as well as up-and-coming altcoins. He is knowledgeable about advanced crypto trading strategies, market analysis, and the nuances of blockchain protocols.

    In addition to managing his own crypto portfolio, Luke shares his expertise with others as a crypto writer and analyst for leading finance publications. He enjoys educating retail traders about digital assets and is a sought-after voice at fintech conferences worldwide.

    When he's not glued to price charts or researching promising new projects, Luke enjoys surfing, travel, and fine wine. He currently resides in Newport Beach, California where he continues to follow crypto markets closely and connect with other industry leaders.

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