In addition to income tax, there is also a capital gains tax on cryptocurrency transactions in the United States. It applies if the value of the cryptocurrency increases when it is purchased and held (subchapter P of Chapter 1 of the U.S. Internal Revenue Code 26).
That is, if a person sold virtual currency that was held as a fixed asset, then this is a taxable event (p. 17 of the IRS Instructions for filing a 1040-2020 return).
When paying capital gains tax, it is necessary to determine the storage period of the cryptocurrency. If the cryptocurrency was held for less than 1 year, then this is short-term capital gains, if more than one year – long-term capital gains. The duration of the cryptocurrency in possession is calculated from the date that occurred the day after the acquisition of the cryptocurrency until the date (inclusive) of its sale.
The tax rate on long-term capital gains for most individuals does not exceed 15%. If your taxable income is $78,750 or less, it is taxed at a zero rate. A 15% capital gains tax rate applies if your taxable income is $78,750 or more but less than $434,550 for single filers; $488,850 for spouses filing jointly or qualifying survivors; $461,700 for the primary income earner; or $244,425 for spouses filing separately.
