Tax Implications of Wrapped Bitcoin on Coinbase (2024)

🔗 Read the full blog:
https://www.cryptotaxaudit.com/blog/tax-implications-of-wrapped-bitcoin-on-coinbase-2024-what-you-need-to-know

Wrapped Bitcoin (cbBTC) is making waves, but what does it mean for your crypto taxes? 🤔

Based on the article “How Wrapped Bitcoin (cbBTC) Impacts Your Crypto Taxes: What Every Trader Needs to Know” by Clinton Donnelly.

In this video, Liam Higgins, Senior Account Manager at CryptoTaxAudit, reads the blog aloud, explaining wrapped Bitcoin, how Coinbase’s cbBTC works, the tax implications of wrapping and unwrapping, and what crypto traders need to know about DeFi yield farming with cbBTC.

💼 What you’ll learn:
• What happens when you wrap BTC into cbBTC on Coinbase
• Do you still own your Bitcoin after wrapping?
• Is wrapping or unwrapping BTC a taxable event?
• How DeFi yield farming income is taxed
• The risks for Bitcoin purists (“not your keys, not your coin”)

Wrapped tokens may unlock DeFi opportunities but add complex reporting challenges. Don’t leave it to chance, the IRS will get these reports starting in 2026.

👉 Book a consultation with our crypto tax experts today:
https://www.cryptotaxaudit.com/crypto-tax-consultation

🔗 Helpful IRS resources: https://www.irs.gov/filing/digital-assets

🔔 Subscribe for more updates on crypto taxation, audits, and strategies to protect your profits.

⏱️ Timestamps
00:00 – Intro: Wrapped BTC and your crypto taxes
00:30 – What is wrapped Bitcoin (cbBTC)?
01:20 – How Coinbase wraps BTC into cbBTC
02:00 – Why cbBTC matters for DeFi yield farming
02:40 – Do you still own your Bitcoin after wrapping?
03:20 – Is wrapping BTC taxable?
03:55 – Selling or burning cbBTC: what’s taxable
04:40 – Yield farming income and tax reporting
05:30 – How CryptoTaxAudit helps with cbBTC reporting
06:10 – Final advice: protect your financial future

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