Hey, hey Loyal DailyCoiners,Today we are going to dive into crypto taxes.As Benjamin Franklin once said:“Nothing is certain except death and taxes.”

Given that, let’s dive in and see how much capital gains tax we have to hand over!

• The Taxman Wants a Slice of Your Crypto Pie 

• How Hungry is the IRS?

• His Majesty is Also Pretty Peckish

How You Share Your Crypto Pie 

In most countries, you must pay tax on your crypto. How it is taxed, however, differs from country to country. 

Today we will focus on the US and the UK, where, yes, the taxman wants a chunk of your chips…but only when you do something with the assets you already hold.In both countries, crypto activities are subject to capital gains tax (CGT).“Crypto activities” include:

• Selling your crypto

• Trading your crypto

• Spending your crypto

When the IRS Comes Sniffing

General US capital gains tax rules apply when performing any crypto activities listed above. You will pay CGT for any profit you make, not the total sale amount. If you make a capital gains loss when you sell/trade or spend your crypto, you can offset these against any capital gains you made, thus reducing your overall tax bill.Taxpayers can offset up to $3,000 per person.

Your tax rate depends on how long you have held the asset.Long-term CGT applies if you have held your crypto for more than 12 months, whereas the short-term CGT rate applies for less than a year.

King Charles and His Tax Goons

UK tax laws treat crypto in a similar way to the US, in that you are liable to pay CGT on crypto activities.

You will be subject to capital gains tax if you dispose of your crypto in one of the following four ways:

• Selling crypto for a fiat currency.

• Trading crypto for another crypto (includes stablecoins).

• Spending crypto on goods or services.

• Gifting crypto to anyone other than your spouse or civil partner.

In the UK, all capital gains are taxed under the same bracket (there is no difference between long or short-term capital gains).The UK government is changing the tax-free allowance in the 2023 tax year from £12,600 to £6,000; please remember this!

As in the US, if you make a capital gains loss, you can reduce your tax bill by offsetting these against any capital gains you made.Unlike the US, however, there is no limit to how much you can offset.Handy, given the recent bear market!

DailyCoin Daily Meme

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