Wondering whether you should sell your Bitcoin?
Let’s be clear: whether or not you should sell your Bitcoin is dependent on multiple factors in your personal life, including but not limited to your current financial situation.
That being said, there are a few factors that every investor should take into account before making the decision to sell. In this guide, we’ll go through three essential questions you should ask yourself before you sell your tokens (and a couple of action items once you’ve made your decision).
Three essential questions to ask before you sell your Bitcoin
How will my profits/losses on Bitcoin be taxed?
Before you make the decision to sell your Bitcoin, it’s important to keep in mind the possible tax ramifications of your decision.
When you sell your Bitcoin, you’ll incur a capital loss or a capital gain based on how the value of your tokens has fluctuated since you originally received them.
You can calculate how much capital gains/capital losses you’ll incur through this simple formula:
If the price of your tokens has gone up in value since it was originally received, you’ll be required to pay capital gains tax on your profits. If you are planning to sell your Bitcoin at a profit, you may want to consider how much money you’ll be left with after taxes.
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If the price of your tokens has gone down in value since it was originally received, you will be able to claim a capital loss and offset your capital gains for the tax year and up to $3000 worth of income. If you are planning to sell your Bitcoin at a loss, you may want to consider how it will impact your capital gains for the tax year
