Cryptocurrency was trading lower across the board early Monday morning.
Bitcoin was down 0.70%, trading at approximately $42,020, while Ethereum was down more than 2.2% trading at $2,850, Coindesk reported. Dogecoin was also down, trading at 14.4 cents, down 1.40%.
Last week, the report said, Bitcoin was trading at more than $46,000 per coin. The cryptocurrency has been stronger this month, Coindesk reported, after starting out near the $38,000 plateau and rising to $41,500 the first week of the month.
Traders were taking profit from Bitcoin in Asia, Coindesk reported, but the cryptocurrency made a comeback Monday afternoon in Asia to remain above $42,000.
With tax season is in full swing, taxpayers who were part of last year’s boom in cryptocurrency and other digital assets like non-fungible tokens (NFTs) are figuring out what it all means for their taxes.
For investors unfamiliar with tax codes, navigating surprise tax bills or complex crypto tax situations could be a challenge during the filing season, so it is important to be well-prepared. Even if cryptocurrency aims to be an alternative to the U.S. dollar, it does not change Americans' tax obligations.
The IRS treats cryptocurrency and other digital assets like property, meaning a taxpayer may owe tax when they exchange or sell assets for a profit. Tax may be due even if a taxpayer exchanges assets for a good or service, such as buying a vehicle with cryptocurrency from e-commerce sites like eBay.