Are you investing in the cryptocurrency market? Last tax year, did you sell some Bitcoin or other type of cryptocurrency? If so, you treat the investment the same as capital assets, similar to a stock or bond. Any gains or losses are taken against the market value of the cryptocurrency when you first acquired it. The value when you received the cryptocurrency is considered your basis.

Currency held for longer than one year qualifies as long-term capital gains, which are subject to rates generally ranging from 0, 15, or 20 percent. Typically, short-term gains from cryptocurrency that’s in your possession for less than a year is taxed as ordinary income.

Like stock market investments, losses can offset capital gains in certain circumstances. Losses that don’t offset can be deducted up to a maximum of $3,000, from other income sources. Losses can even be carried over into future tax years.

Complete Form 8949 to calculate the amount of gains or losses, which are then reported on Schedule D along with capital gains received from non-cryptocurrency investments.

If you purchased a product or other service with Bitcoins or any other cryptocurrency, there may be some tax implications. For example: You bought Bitcoins in late 2013 at $1,000 market value, then used that investment to buy a car at $20,000, you’d have a long-term capital gain to claim of $19,000. Similarly, if you suffer a loss when using cryptocurrency to buy product, you’ll need to report that on your tax form.