What Are The Tax Implications For Receiving Foreign Crypto Gift?

[dangeruss]

I am a US citizen, If I receive crypto currencies from my parents, who are foreigners, through crypto wallet and sell them on US platforms like Kraken/Coinbase for dollars, how do I report taxes?

What kind of proof would IRS require to prove the source of these cryptos? 

Say the market value for such crypto was 30 when I received it and I sold it for 35. Is capital gain calculated by 30-0=30(Since they are gifts) or 35-30=5?

Thank you for your help

[SusanY1]

For calculating the gain, if your parents transfer crypto to you, their cost (basis) in the assets becomes yours.  The gain upon sale is then calculated based on those values.  

You'll need to keep your own records to back up the basis. 

If the value of the assets transferred to you by your parents exceeds $100,000 in aggregate over the course of the year (combined with any other gifts from your parents) using the value on the date of the transfer, then you will also need to file a Form 3520 the year following the gift.  This form is filed separately from your tax return.