As I understand it, capital gains tax applies when you sell your coins as you have realized those gains and it becomes an income source that must be reported and payed appropriately in accordance with your local tax laws. My question is, if an individual uses their BTC to buy goods or services is that seen as a realized gain prior to the purchase of said product?
I apologize if this topic is tiresome or repetitive to the forum savvy, but feel free to ELI5 or if you have the time I welcome links to resources that I may do my own research and save you the energy.
Thanks in advance!
Your question relies on your country crypto taxation. We have different rules but crypto is considered as subjected to capital gain tax if your country regulates crypto.
In my country, there’s no clear guidelines about crypto taxation that’s why crypto has no tax bit according to my accountant I should pay capital gain tax if I will be honest with the law since I’m gaining something from my crypto.
If your country doesn’t have crypto taxation, it’s up to you if you will be honest or not on paying taxes.