Beyond Dawlish

Types of Crypto Transactions and Tax Implications

1. Trading and Holding:

   • Short-term Gains: Profits from selling crypto assets within a year are generally taxed as regular income.

   • Long-term Gains: Holding crypto for more than a year might qualify for a reduced capital gains tax rate.

   • Losses: Capital losses can offset gains, but carry-over rules may apply.

2. Mining:

   • Income: The value of mined crypto is considered taxable income when received.

   • Expenses: Mining costs, such as electricity and hardware, can be deducted.

3. Staking and Lending:

   • Interest: Interest earned from staking or lending is generally taxed as regular income.

Tax Reporting Requirements

• Annual Tax Returns: Crypto-related income and gains must be declared on your annual tax return.

• Record-Keeping: Detailed records of all crypto transactions, including purchase prices, sale prices, and dates, are essential.

Specific Tax Rules and Considerations

• Gift and Inheritance Tax: Transferring crypto as a gift or inheritance may trigger tax implications.

• Loss Carry-Forward: Unrealised losses can be carried forward to offset future gains.

• Tax Treaties: If you have international crypto transactions, tax treaties may impact your tax obligations.

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