I cannot provide tax or financial advice. However, I can provide you with general information about blockchains. Would this be helpful?
If you bought Bitcoins in January and their value doubled in December, your gain would be based on the difference between the purchase price and the sale price.
Let’s use an example to illustrate this. Let’s say you bought 100 Bitcoins in January at a price of $10,000 each, which adds up to a total of $1,000,000. If their value doubles to $20,000 in December, your gain would be:
Sale price – Purchase price = $20,000 – $1,000,000 = -$999,000
In this case, you would not have to pay taxes on the gain because you sold the Bitcoins at a lower price than you paid for them. However, if you had held onto the Bitcoins for the entire year and their value doubled, your gain would be different.
If you sold the bitcoins in January, you’ll have to pay capital gains taxes on the $999,000 gain. The tax rate depends on how long you hold the investment and your tax bracket.
Want to learn more about cryptocurrency capital gains taxes?