We’re not tax advisors at CoinDiligent, so you should hire a professional tax consultant if you need help. That being said, in most countries investing in cryptocurrencies is NOT tax-free and you will have to file your taxes for cryptocurrency profits.
In order to make your job easier when tax season arrives, its recommended to either keep track of all your investments and trades on a spreadsheet or to purchase a tool like CoinTracker or Bitcoin.Tax, which will take care of everything for you.
When using a tool like CoinTracker, you will only have to connect your crypto exchange accounts and wallets to it, and the software will automatically analyze all your data and calculate your tax liability.
It’s important to note that in most jurisdictions, crypto to crypto trades also represent a taxable event. That means that if you purchase Bitcoin, and use that Bitcoin to purchase another cryptocurrency, that is most likely a taxable event where you live.