Crypto gains question......
Letís say you buy a million dollar diamond ring from jeweler who accepts crypto.
You have crypto now worth 1M and your basis is 200K.
I know crypto is taxed as property and would be subject to long term or short term capital gains depending on your period of ownership.
In my example, youíre effectively making a purchase with previously unrealized (and untaxed) gains. What does the IRS consider to be the taxable event? And when you consider the anonymity of crypto, how is the transaction reported?
Forgive me if these are dumb questions with obvious answers.