Bitcoin (CRYPTO: BTC) has reached record highs in 2021, leaving investors with portfolio balances that may have quadrupled in value. If you hit the sell button on your Bitcoin investments this year and earned a profit, you’ll have to share your success with the IRS.
Selling Bitcoin is a taxable event. You are required to report your gains or losses on your tax return. Just like gains on stock investments, the additional income you receive from Bitcoin could push you into a higher tax bracket.
But before you start panicking, we’ve put together a few items to consider when measuring the impact of your Bitcoin profits on your tax return.