Question

sydney bought cryptocurrency and then converted some to dollars, sold some, exchanged her bitcoin for ethereum, and used some to buy a plane ticket. which actions involving cryptocurrency does sydney need to report to the irs for tax purposes? only converting the cryptocurrency to dollars all actions except the original purchase of cryptocurrency only selling some and buying the plane ticket all of the transactions where she made money

Explanation:

In the US, for tax purposes, the initial purchase of cryptocurrency is not a taxable event. However, actions like converting crypto to dollars (realizing gains/losses), selling crypto, exchanging one crypto for another (like Bitcoin to Ethereum), and using crypto to buy goods/services (like a plane ticket) are taxable as they involve disposing of or using the cryptocurrency, which can trigger capital gains/losses or income reporting. So all actions except the original purchase need to be reported.

Answer:

B. All actions except the original purchase of cryptocurrency