What is realized gain/loss in the context of cryptocurrency trading?

1 answers

• Lunde JohansenMay 12, 2024 · a year ago
  Realized gain/loss is an important concept in cryptocurrency trading. It refers to the profit or loss that you actually realize when you sell your cryptocurrencies. Let me break it down for you. When you buy a cryptocurrency, let's say Bitcoin, at a certain price, and then sell it at a higher price, the difference between the selling price and the buying price is your realized gain. On the other hand, if you sell it at a lower price than what you bought it for, you will have a realized loss. Realized gain/loss affects your overall profit or loss because it is considered taxable income or deductible loss. So, it's crucial to keep track of your realized gain/loss for tax purposes and to accurately calculate your net profit or loss from cryptocurrency trading.
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