How to protect your crypto gains

 This is to help you avoid any penalties from underreporting and giveaways from overreporting.  The government considers crypto as a property so you must pay capital gain taxes on your profits from crypto.  In other words crypto is seen by the government as a store of value and a means of trade.  The internal revenue service determines crypto as neither currency or security, but rather as a belonging.  Capital gain tax will very whether or not you have held your crypto for over a year, or under a year.  For long term capital gains, crypto held over a year, you can get your tax rate to be 15% or lower.  For short term capital gains, crypto held less than a year, they consider it as income and you have to pay up to 37% depending on your income level.  Crypto exchanges have the right to report you, US based coin exchanges, file data reports on clients with over 200 trades, which is much easier to get to than one would think.  The 1099 K is required for a customer that makes over 200 purchases and profited over $20,000 in a calendar year.  Some states have thresholds that are lower, the 1099 B that stock brokers register, except there's no 200 trade minimum, and just because no one sent you a form does not mean you are exempt.  The IRS counts 3 different things as tax events; when you sold crypto for cash, when you traded crypto for other crypto, and when you buy something with crypto.  When you sell crypto for cash to a strange guy at a gas station is not a taxable event, but when you exchange your crypto for USD on an exchange like Coinbase it is.  The other non taxable events is when coins are transferred between wallets and when you hodl (hold/not sell).  Now with DFI  (decentralized finance) you can take a loan against your crypto.  Many would suggest to never sell your bitcoin and never sell your Ethereum, since they will continue to appreciate over time and you can take loans against them like a mortgage.  If you dicide to do any taxable events be sure to file and it is suggest to see a tax expert.   A great resource to use is https://taxbit.com and you will probably save more money in the long run, you definitely don't want to get your gains taken later down the road.  As long as you are not intentionally hiding something you're probably going to be just fine.