Which Crypto Transactions Are Taxable? A Complete List
Many crypto activities are taxable, including selling, trading, spending, and earning. This post lists taxable and non-taxable events, like gifts and transfers between your own wallets.
Not all crypto transactions are taxable. Knowing which ones trigger taxes can help you stay compliant. Here is a comprehensive list.
Taxable Events
Selling crypto for fiat currency: This is a capital gain or loss. Trading one crypto for another: The IRS treats this as a sale of the first crypto, triggering a taxable event. Spending crypto on goods or services: You realize a gain or loss based on the value at the time of spending. Receiving crypto as payment for work or services: This is ordinary income equal to the fair market value at receipt. Earning crypto through mining or staking: These are taxable as ordinary income at the time of receipt. Receiving airdrops or hard forks: Taxable as ordinary income when you gain control. Earning interest or rewards from lending/DeFi: Taxable as ordinary income.
Non-Taxable Events
Buying crypto with fiat: No tax until you sell. Transferring crypto between your own wallets: Not a taxable event, but keep records for cost basis tracking. Gifting crypto: The recipient receives the donor's cost basis. Gifts under $15,000 per year per recipient (in 2023) may not require gift tax filing. Donating crypto to a qualified charity: You can deduct the fair market value and avoid capital gains tax. Holding crypto without transacting: No tax.
Record-Keeping Tips
Track the date, amount, value in USD, and purpose of every transaction. Use crypto tax software to simplify reporting. Always consult a tax professional for your specific situation.