Purchases denominated in BTC are treated as realized gains or losses: > cryptocurrency users must deal with capital gains and losses in addition to whatever sa

Purchases denominated in BTC are treated as realized gains or losses: > cryptocurrency users must deal with capital gains and losses in addition to whatever sales taxes they might face at the point of sale. > For example, let's imagine you bought $10 worth of Bitcoin two years ago and it has since appreciated to $100 in value. If you sold it on an exchange, you'd have $90 of realized long-term capital gains, just like you would with any other capital asset. > If you instead used that same $100 worth of Bitcoin to buy groceries from the supermarket, you'd still have to pay long-term capital gains taxes on the $90 difference between appreciated value and your cost basis. https://www.kiplinger.com/taxes/capital-gains-tax/603117/how-is-cryptocurrency-taxed-what-you-need-to-know https://www.kiplinger.com/taxes/capital-gains-tax/603117/how... > If the fair market value of property received in exchange for virtual currency exceeds the taxpayer’s adjusted basis of the virtual currency, the taxpayer has taxable gain. The taxpayer has a loss if the fair market value of the property received is less than the adjusted basis of the virtual currency. https://www.irs.gov/pub/irs-drop/n-14-21.pdf https://www.irs.gov/pub/irs-drop/n-14-21.pdf