Trading cryptocurrency? You must report these transactions to the IRS

Millions of buyers and sellers of cryptocurrency will need to declare their digital currency transactions to the IRS.

Many, but not all, transactions made in bitcoin, ethereum and other digital currencies must be reported to the federal government. That's leaving some crypto first-timers confused about how to prep their taxes.

First off, if you used regular U.S. dollars to purchase assets in cryptocurrency that have remained in an exchange or cryptocurrency wallet, rest easy since you do not have a tax liability and no reporting is required, Chandrasekera told CBS News Streaming.

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