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7. You’ve received income as soon as you receive crypto

A word of caution, choosing to hold in crypto does not avoid the eventual SE tax you’ll get hit with. If you decide to hold on to your hard earned crypto, just because you do not convert it back to fiat does not mean you can avoid reporting self employment income. Remember you had income the moment you receive the property. So keep that in mind throughout the year.

8. Business Expenses

Business expenses paid with crypto should be treated as if the crypto were sold for USD and then the expense was incurred in USD.

Example: You paid another contractor 100 EOS for services today, (EOS is currently 5 USD/EOS and that EOS paid was originally “earned” back when EOS was 9 USD/EOS), you would realize a 400 USD (or long)term capital loss (proceeds of 500 minus basis of 900), and then normal business expense for the services of 500 USD.

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