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In this case you're not "cashing" them out, though. You are directly purchasing goods. Does that sort of thing still incur capital gains tax in the US?
by seabass 5y ago
In this case you're not "cashing" them out, though. You are directly purchasing goods. Does that sort of thing still incur capital gains tax in the US?
- stale2002 5y ago> Does that sort of thing still incur capital gains tax in the US? Yes it does. It would be same as if you purchased a large amount of gold, and then exchanged the gold for a car, after gold had increased in price. In the gold situation, you would also pay capital gains, and the US treats crypto the same as property, in this regard.
- ineedasername 5y agoStill taxed. You're effectively selling them your Bitcoin for the car. Or think if it with any other currency: if you bought Yen as part of your investment portfolio and it increased relative to USD, you still have capitol gains when you cashed it out. Basically whenever you leave any financial position that increased in value for something not a financial asset then capitol gains are likely (there are exceptions)
- belltaco 5y agoImagine if buying goods didn't incur capital gains. That'd mean you can resell the goods in new condition for a very small loss and get USD but save much more in taxes. IRS said a long time ago that crypto was like any other asset, like gold.