micah c. miracle on Nostr: Taxes on short-term gains are based on income and range between 10 and 37% of your ...
Taxes on short-term gains are based on income and range between 10 and 37% of your gains at the time of disposal (when you spend it).
So if you buy $1000 of bitcoin on Jan. 1st at $100k per BTC and bitcoin goes up 10% before you pay off your credit card on Feb. 1 (let's assume you pay off $500 on your card and BTC is now 110k) then the 50 bucks of gains you made (simplified here) would be taxed at your income rate. If your income puts that rate at say, 24%, then you owe $12 to .gov.
You still did much better than paying your $500 in fiat when it was due. In fact, you end up with reducing what you've paid by $38.
If you have bitcoin that you've held for more than 1 year in Strike (or you transfer some to Strike), you could use that and pay less taxes.
So if you buy $1000 of bitcoin on Jan. 1st at $100k per BTC and bitcoin goes up 10% before you pay off your credit card on Feb. 1 (let's assume you pay off $500 on your card and BTC is now 110k) then the 50 bucks of gains you made (simplified here) would be taxed at your income rate. If your income puts that rate at say, 24%, then you owe $12 to .gov.
You still did much better than paying your $500 in fiat when it was due. In fact, you end up with reducing what you've paid by $38.
If you have bitcoin that you've held for more than 1 year in Strike (or you transfer some to Strike), you could use that and pay less taxes.