Gsic Group

Cryptocurrency taxation is governed by the principle that digital assets are treated as property for tax purposes, similar to stocks or real estate. This classification means transactions are subject to two primary tax categories: Capital Gains/Losses and Taxable Ordinary Income. Understanding this distinction is essential for compliance.

A capital gain or loss occurs when a taxpayer sells, trades, or otherwise disposes of a cryptocurrency for a value different from their original Cost Basis.

The Cost Basis is the original amount (in fiat currency, like USD) paid for the cryptocurrency, including any fees or commissions incurred during the purchase.