IRS Crypto Tax Rules Explained

When dealing with IRS crypto, the U.S. Internal Revenue Service's framework for taxing cryptocurrency activity. Also known as crypto tax compliance, it forces anyone who trades, mines, or earns digital assets to track every move and file the right paperwork.

Another key player is crypto taxes, the broader set of tax obligations that apply to buying, selling, staking, and gifting crypto. digital asset taxation links directly to how the IRS defines taxable events, which means every sale or swap can become a capital‑gain line on your return. IRS crypto tax requirements also depend on tax reporting, the process of disclosing crypto activity to the government via forms like 8949 and Schedule D. The IRS expects you to fill out those forms, attach supporting statements, and answer the binary yes/no question about crypto on Form 1040.

Practical Steps to Stay Compliant

First, treat every exchange like a broker. crypto exchanges, platforms where you trade, hold, or earn digital tokens are required to send 1099‑K forms if you exceed $600 in transactions. When an exchange issues a 1099, you simply copy the numbers to your 8949; if it doesn’t, you must build your own transaction log from CSV exports or blockchain explorers. Next, distinguish between short‑term and long‑term holdings. The IRS counts a holding period of more than 365 days as long‑term, which drops the tax rate from ordinary‑income brackets to 0‑20% for most people.

Second, watch for taxable events beyond simple trades. Mining rewards count as ordinary income at fair market value on the day you receive them. Staking payouts are also income, but if you later sell the staked tokens you incur a second capital‑gain event. Gifting crypto under $15,000 per recipient per year avoids gift‑tax filing, but you still need a basis record for the recipient. Finally, consider loss‑harvesting. If you sell at a loss, the IRS lets you offset up to $3,000 of ordinary income each year, and the remaining loss rolls forward.

All these pieces—exchange reporting, transaction tracking, holding periods, and loss strategies—fit together like a puzzle. Below you’ll find a curated list of articles that break each part down, from detailed exchange reviews to step‑by‑step airdrop guides that also touch on tax implications. Dive into the posts to get actionable tips, real‑world examples, and the latest updates on how the IRS handles crypto in 2025 and beyond.