Cryptocurrency Tax Guide

How are cryptocurrency gains taxed?

The IRS treats cryptocurrency as property, so every taxable event — selling, trading one crypto for another, or using crypto to buy goods — triggers a capital gains calculation. Short-term gains (held under a year) are taxed as ordinary income; long-term gains get preferential rates. You also owe income tax on crypto received as payment for services or through mining, at its fair market value on the day received.

How do I report cryptocurrency on my taxes?

The IRS treats cryptocurrency as property. You must report capital gains or losses each time you sell, trade, or spend crypto. If held over a year, gains qualify for lower long-term capital gains rates. Receiving crypto as payment is treated as ordinary income.