In 2016 I was visiting a friend in another country and he asked me to bring him a waffle maker (~$35). He paid me back for the waffle maker in Bitcoin. I sold that Bitcoin in 2020 for ~$740. I believe that I need to declare that on my 2020 US Taxes. I'm looking for advice on how to do this.
Investopedia seems to indicate that if I bought or sold goods to my friend, this money would count as income. I'm not sure that's how I'd characterize the transaction, but I'm willing to go with it. I'm also not sure if that means I need to declare the $35 on my 2016 taxes, or if I should be declaring the $740 on my 2020 taxes, or maybe just $705 on my 2020 taxes? Also, if we think of me as some kind of waffle-maker middle-man, then by bringing the waffle maker across international boarders with the express purpose of selling it (ie getting paid back for it), did I commit fraud?
Maybe since it wasn't really a goods-and-services transaction it needs to be thought of as an investment? I could have sold it right away, but since I didn't... does that make it an investment instead?
I would appreciate advice on how to report this on my US taxes.