Assets, Bitcoin

Can I Buy Bitcoin in My Roth IRA?

Bitcoin has been on a tear lately. The digital currency hit an all-time high of $2,000 on May 25, and then topped $3,000 on June 11.

As the price has surged, so has interest in buying Bitcoin.

But can you buy Bitcoin in your Roth IRA? The answer is maybe.

Here’s a look at what you need to know about investing in Bitcoin in your retirement account.

What is Bitcoin?

Bitcoin is a decentralized digital currency that can be used to buy goods and services, or traded like a stock. Transactions are recorded on a public ledger called the blockchain.

Bitcoins are created through a process called mining. Miners solve complex math problems to verify transactions and add new blocks to the blockchain.

For their work, they are rewarded with new bitcoins.

How can I buy Bitcoin?

There are a few ways to buy Bitcoin. The most common is to set up an account with an exchange such as Coinbase, Bitstamp, or Kraken.

These exchanges allow you to buy Bitcoin with fiat currencies such as dollars or euros.

You can also find people who are willing to trade Bitcoins for goods and services. The most popular way to do this is through LocalBitcoins.

com, which connects buyers and sellers in more than 15,000 cities around the world.

What about taxes?

When you sell Bitcoin, you will owe taxes on any gains. For example, let’s say you bought one bitcoin for $1,000 in January and sold it for $10,000 in December.

You would owe capital gains taxes on your $9,000 profit.

The IRS has said that Bitcoin and other digital currencies should be treated as property for tax purposes. That means you will owe long-term capital gains taxes if you hold onto your bitcoins for more than a year before selling them.

Short-term capital gains taxes apply if you sell your bitcoins within a year of buying them.

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