Cryptocurrency is taxed when you receive it as payment or have a transaction where you sell or trade it. If you just buy it and hold onto it, it won’t be taxed until you do something with it. Even if you don't receive a 1099-B, 1099-MISC, 1099-K, or summary tax statement for your cryptocurrency transactions, it’s your responsibility to report them.
For tax purposes, it’s either considered earned income or treated as property sales. We can help you figure out which applies to your situation.
It’s considered earned income when you:
- Receive it as payment for goods or services (like if you were paid in cash)
- Mine it and make a profit
- Receive new cryptocurrency from a hard for followed by an airdrop or other transfer
It’s treated as a property sale, and the earnings are capital gains, when you:
- Sell it (like you would stock)
- Exchange it (swap one type of cryptocurrency for another)
- Spend it (use it as payment for goods and services)
- Convert it to US dollars (sell cryptocurrency to buy regular currency)
If you donate cryptocurrency, it isn’t taxed. In fact, you may be able to get a deduction for the donation.
- How do I report earnings or losses from Bitcoin and other cryptocurrency?
- How do I report Bitcoin or other cryptocurrency as a capital gain?
- I didn’t receive a 1099-MISC, 1099-B, or 1099-K for my Bitcoin or other cryptocurrency earnings, do I have to report them?
- I’m mining Bitcoin, what does that mean for my taxes?
- What if I didn’t get a 1099-NEC or 1099-MISC, but made money from self-employment?