Everybody thinks of how much money they are going to make when they buy bitcoin or other cryptocurrencies. They can already picture the Lambo in their garage! Yet, nobody really puts much thought into how their newfound wealth is going to affect their tax situation.
Your tax situation and what you need to pay are going to depend on a lot of different factors. There is where you live that mostly comes into play as different countries have their own tax codes to deal with this new way of making money. For instance, if you buy Ethereum Canada will have a much different tax structure than a country like Switzerland.
The problem is also that bitcoin is not like an ordinary currency and it sits in some strange gray areas. This confuses governments that need to make sure that they are able to get some tax revenue without stifling the use of said currency. Since bitcoin can easily fly under the radar there is even more of an incentive to make sure that it is taxed correctly.
In this article, we will go over how you can likely expect your gains from cryptocurrency to end up taxed.
