PayPal, Bitcoin and Taxes (oh, my!) #CryptoGeek

Over the past year, PayPal's stock value has surged considerably along with many others in the online payments processing realm.  Indeed, prior to 2020 PayPal had already solidly established itself as the fourth-largest payments processor behind Visa, Mastercard and Discover.  PayPal is now the largest of all pure-digital payments processors with more currently-active PayPal accounts than the entire population of the United States.  

 

If this weren't already enough, in 2020 PayPal decided to go "all-in" on Cryptocurrencies like Bitcoin, Ethereum, and Litecoin.  You can now easily buy and sell Cryptocurrencies (a.k.a., "crypto") with a standard (free) PayPal account.  This move by PayPal brings crypto accessibility to the masses more than anything has before.  However, the masses are largely not up to speed with how crypto is different from typical currency and, perhaps more importantly, how spending crypto can have a major impact on taxes for US citizens.

The short version: 

• Treat crypto like stocks, not money.
• Every crypto transaction has end-of-year tax implications.
• It is super-easy to get into crypto with a (free) PayPal account.  
• You can quickly make or lose lots of money with crypto.

The long version: 
Read on...