
Wondering how to report your Dogecoin transactions on your taxes?
By the time you finish reading this article, you’ll know how to correctly report Dogecoin profits and losses. We’ll also discuss a special situation where selling Dogecoin can even reduce your tax bill.
What is Dogecoin?
Dogecoin is a cryptocurrency that was created in 2013 by software engineers Billy Marcus and Jackson Palmer. The cryptocurrency was modeled after ‘Doge’, a popular meme at the time.
In the following years, the cryptocurrency took on a life of its own. In May 2021, Dogecoin’s market cap soared upwards of $20 billion, after it was publicized by celebrities like Elon Musk and Mark Cuban.
How is Dogecoin taxed?
Just like other cryptocurrencies, Dogecoin is considered property by the IRS. That means Dogecoin is subject to both capital gains tax and income tax.
Capital gains tax: Selling your Dogecoin or using it to purchase goods and services is considered a disposal event. You will incur capital gains or capital losses depending on how the price of your Dogecoin has fluctuated since you originally received it.
Income tax: If you earn Dogecoin through mining or through work, this is considered ordinary income. You will be required to pay income tax on your earnings.
Three common Dogecoin taxable events
Let’s run through a few common scenarios where you’ll need to report Dogecoin on your taxes.
I sold my Dogecoin for a profit.
Selling Dogecoin at a profit means that you’ll be required to pay capital gains based on how much the value of your Dogecoin has increased since you originally received it.
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Remember, capital gain tax varies depending on how long you’ve held your Dogecoin. If you’ve held it for longer than 12 months, you’ll pay taxes at the long-term capital gain rate. If you held your Dogecoin for less than 12 months, you’ll need to pay taxes at the short-term capital gain rate, which is higher.

I sold my Dogecoin at a loss
When you sell Dogecoin at a loss, you’ll incur capital losses depending on how much the value of your Dogecoin has decreased since you originally received it.
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