Litecoin and Taxes
Taxes are no joke. It is highly recommended that you take the time and work through the forms or pay for a service to help you pay your cryptocurrency taxes and try not to dodge the government. There are some great sites out there to help you calculate your taxes and even integrate with popular tax prep software like TurboTax.
I have been saying for some time that companies like H&R Block need to have crypto tax consultants in place that charge, say, $100 an hour for tax consultation. Personally speaking, I would do that and take notes! There are a lot of questions about taxes by the cryptocurrency community generally, which is a really good thing. Luckily there are services like the Happy Tax Service that have on staff, full CPA tax advisors willing to help.
Generally speaking, the IRS views cryptocurrencies as property for tax purposes. The IRS has already sued Coinbase to gain Know Your Customer (KYC) information about those who have moved more than $20,000 or more on their platform while trading in cryptocurrencies. Coinbase fought it and significantly reduced the amount of information granted to the IRS, but suffice it to say that the IRS is very interested in redeeming their rightful money owed for tax purposes.
Because it is regulated as a property according to the IRS, every transaction must be reported, but if you just buy and HODL, you do not need to worry. It is the transactions that must be reported when you sell or transfer your Litecoin.
Some great links for taking care of your taxes are: