The US Cryptocurrency Tax Guide 2023

Welcome to the comprehensive guide on cryptocurrency taxes in the United States for the year 2023.

Cryptocurrency as Property

In the United States, the IRS views cryptocurrencies as property. Therefore, they are subject to capital gains tax. This means that profits from selling cryptocurrencies that were held for investment purposes are treated like capital assets and taxed accordingly.

Tax Rates

The tax rate can vary based on how long you've held the cryptocurrency and can be anywhere from 0% to 20% for long-term investments (over 1 year) and from 10% to 37% for short-term investments. Please check with a tax professional for your specific circumstances.

Mining and Staking

Mining and staking crypto is also considered taxable by the IRS. When you mine or stake cryptocurrency, it is considered income and is subject to income tax. The amount of tax depends on the market value of the cryptocurrency at the time you gained control over it.

Crypto Gifts and Donations

If you receive a gift or donation in crypto, it is not treated as income and is not subject to tax. However, if you sell, trade, or use it, there may be tax consequences, and capital gains tax may apply.

Reporting Cryptocurrency on Taxes

Every American taxpayer is asked whether they sold, received, sent, or exchanged any virtual currency when filing their tax return. It is essential to keep accurate records of all your cryptocurrency transactions to ensure you are reporting and paying correctly.