Cryptocurrency Taxes: What You Owe and How to Report It
Every crypto trade is a taxable event. Yes, even swapping one coin for another. Here is the complete guide.
The IRS treats cryptocurrency as property, not currency. This means every sale, swap, or spending event triggers a capital gains calculation. Most crypto holders are unknowingly non-compliant.
What Is Taxable
Selling crypto for USD: capital gain/loss. Trading crypto for another crypto (BTC to ETH): capital gain/loss. Buying goods with crypto: capital gain/loss. Receiving crypto as payment: ordinary income. Mining/staking rewards: ordinary income at fair market value when received.
What Is NOT Taxable
Buying crypto with USD: no tax event. Transferring between your own wallets: not taxable. Holding (HODLing): no tax until you sell. Gifting crypto (under $18,000/year): no tax for giver.
Short-Term vs Long-Term
Held under 1 year: short-term capital gains (taxed as ordinary income, up to 37%). Held over 1 year: long-term (0%, 15%, or 20% depending on income). The difference between 37% and 15% on a $50,000 gain is $11,000. HODL past 12 months if possible.
India: The Harshest Regime
India taxes crypto at 30% flat (no slab benefit) plus 1% TDS on every transaction. No loss offsetting allowed. Effectively a 31.2% tax with zero deductions — among the strictest globally.
Calculate your crypto taxes with our crypto tax calculator and track gains with the profit calculator.