{"id":2157,"date":"2022-05-19T16:29:02","date_gmt":"2022-05-19T16:29:02","guid":{"rendered":"https:\/\/www.aurumxchange.com\/?p=2157"},"modified":"2022-05-19T16:29:02","modified_gmt":"2022-05-19T16:29:02","slug":"5-steps-to-take-before-selling-cryptocurrency-for-fiat","status":"publish","type":"post","link":"https:\/\/www.aurumxchange.com\/blog\/5-steps-to-take-before-selling-cryptocurrency-for-fiat\/","title":{"rendered":"5 Steps to Take Before Selling Cryptocurrency for Fiat"},"content":{"rendered":"<p><iframe width=\"100%\" height=300vh src=\"https:\/\/www.youtube.com\/embed\/eA6PceCDmpk?autoplay=1&#038;mute=1\"><\/iframe>If you&#8217;re selling your cryptocurrency, whether to take some profits off the table or because you want to exchange it for another currency, there are a few important steps to take.<\/p>\n<p>Selling cryptocurrency can be a complicated process, but it is also important to make sure that you are following the correct steps. This can help ensure that you are not inadvertently breaking any laws and that you are getting the best possible value from your currencies.<\/p>\n<p>Here are five steps to take before selling your cryptocurrency for fiat:<\/p>\n<p>1. Pay Capital Gains Taxes<\/p>\n<p>One of the most important things to do before doing any type of sell order is to pay your taxes that are due on those gains. You may not have realized it when you bought into the currency, but your buying and selling of cryptocurrency constitutes a taxable event in many countries. This means that each time you buy or sell you need to report this on your taxes at the end of the year. You will owe capital gains taxes on each of these events. While it may be tempting to avoid paying this tax, remember that depending on where you live, there are serious consequences for not paying them.<\/p>\n<p>2. Know Which Exchange Rates Apply<\/p>\n<p>When you want to sell your cryptocurrency, it is important to know which exchange rates apply in order<\/p>\n<p>When it comes time to sell your crypto, you first need to understand the benefits of keeping it. For instance, if you have cryptocurrency in your wallet that you do not plan on spending anytime soon, or even see it as an investment for the future, then it is always better to hold it for longer.<\/p>\n<p>However, if you&#8217;re considering selling a portion of your cryptocurrency to cash out and use fiat money, then there are some things you should consider before doing so. Here are five things to take into account before selling your cryptocurrency:<\/p>\n<p>1. How much money did I spend on the cryptocurrency?<\/p>\n<p>If you spent $500 on a coin and it is worth $1000 now, then yes you doubled your money but how much did you actually make? You spent $500 to make $500. With that in mind, don&#8217;t get greedy with the gains. Take what you made and enjoy it! After all, it was free money right?<\/p>\n<p>2. What kind of tax bracket do I fall under?<\/p>\n<p>Fiat currency can be taxed and so can crypto! If you are unsure about how taxes work for capital gains or losses then there is a lot of information online that can help guide you through the process. The general rule is: if you made money then<\/p>\n<p>Cryptocurrency enthusiasts will always have the opinion that it is better to hold cryptocurrency than to sell them for fiat. At first, this idea is good for building the ecosystem, as it keeps cryptocurrencies in circulation.<\/p>\n<p>But there are times when a person needs to convert their cryptocurrency into fiat currency. This will require you to know how to convert cryptocurrency into fiat currency. As it is not as simple as withdrawing money from an ATM and you do not want to lose your capital.<\/p>\n<p>Here are some tips that can be used before selling cryptocurrency:<\/p>\n<p>Cryptocurrency is a new and exciting asset class that has emerged in the last half-decade. It is a speculative asset, akin to stocks or traditional commodities. Cryptocurrencies are based on blockchain technology and can be bought, sold and traded on crypto exchanges.<\/p>\n<p>Cryptocurrencies have come a long way since the early days of Bitcoin. Today there are 2,000+ cryptocurrencies to choose from and each one has its own strengths, weaknesses and use cases. Many investors have chosen to invest in cryptocurrencies by holding them for the long term (HODL\u2019ing) while others choose to invest in a manner similar to that of stocks \u2013 buy low, sell high!<\/p>\n<p>In this blog post we will take a look at the process of selling crypto for fiat currency (cash). We will discuss some of the reasons why people sell their crypto holdings and provide you with five steps you should follow before selling your crypto for fiat currency.<\/p>\n<p>1. Check Your Tax Rate and Calculate Your Capital Gains<\/p>\n<p>While selling cryptocurrency for fiat is the most popular way to cash out, some people choose to keep their crypto rather than sell it. If you&#8217;re planning on doing that, it&#8217;s essential to understand capital gains tax.<\/p>\n<p>In the U.S., cryptocurrency is taxed as property, not currency, so capital gains tax will apply to any increase in value you see from when you first bought or received your crypto. You will also be taxed if you receive airdrops or hard forks in the future as long as you still hold the crypto. The rate of taxation and when you are required to pay will depend on how long you&#8217;ve held the cryptocurrency: a short-term gain is subject to ordinary income tax rates and applies if you hold the crypto for less than a year; a long-term gain has lower tax rates and applies if you hold the asset for more than a year.<\/p>\n<p>2. Put Together Your Sale Strategy<\/p>\n<p>Once you decide to sell your crypto, there are several different selling methods available: peer-to-peer (P2P) sales, exchange sales, and over-the-counter (OTC) sales. Each method has its own benefits and drawbacks, so it<\/p>\n<p>The value of Bitcoin and other cryptocurrencies has steadily increased, leading many to wonder if they should take profits before the bubble bursts. While it&#8217;s easy to sell your crypto for fiat currency (USD, EUR, etc.) through an exchange or peer-to-peer transaction, selling cryptocurrency comes with its own set of considerations and risks.<\/p>\n<p>On the positive side, selling your cryptocurrency holdings could allow you to diversify your income sources and grow your wealth outside of crypto. On the other hand, selling too early could mean losing out on future gains. In this blog post, we&#8217;ll share five tips for deciding when and how to sell cryptocurrency.<\/p>\n<p>Step 1: Understand Taxes &#038; Regulations<\/p>\n<p>The first thing you&#8217;ll want to do is figure out how much tax you&#8217;ll owe on any capital gains that may result from selling cryptocurrency. For example, if you bought Bitcoin at $10k USD and sold it at $20k USD, you would have a $10k capital gain, which would be taxed as income unless it qualifies as a long-term capital gain (more on that below). If you&#8217;d like more information about taxes related to crypto investing and trading in the United States, check out this guide by CryptoTrader.Tax.<\/p>\n<p>It&#8217;s also important to note that<\/p>\n<p>1. Know the IRS Rules<\/p>\n<p>2. Understand the Tax Implications of Selling<\/p>\n<p>3. Keep Detailed Records<\/p>\n<p>4. Document Your Losses (If You Have Them)<\/p>\n<p>5. Work With a Tax Professional<iframe width=\"100%\"\" height=300vh src=\"https:\/\/www.youtube.com\/embed\/xduie0guLQI?autoplay=1&#038;mute=1\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you&#8217;re selling your cryptocurrency, whether to take some profits off the table or because you want to exchange it for another currency, there are a few important steps to take. Selling cryptocurrency can be a complicated process, but it is also important to make sure that you are following the correct steps. This can [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/posts\/2157"}],"collection":[{"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/comments?post=2157"}],"version-history":[{"count":1,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/posts\/2157\/revisions"}],"predecessor-version":[{"id":2158,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/posts\/2157\/revisions\/2158"}],"wp:attachment":[{"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/media?parent=2157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/categories?post=2157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aurumxchange.com\/wp-json\/wp\/v2\/tags?post=2157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}