Crypto Tax Basics

In most countries, crypto is taxable. Understanding the basics helps you stay compliant and avoid surprises.

Disclaimer

This is educational information, not tax advice. Consult a tax professional for your specific situation.

Taxable Events (US)

Capital Gains Tax applies when you:

- Sell crypto for fiat

- Trade one crypto for another

- Use crypto to buy goods/services

Income Tax applies when you:

- Receive mining/staking rewards

- Get paid in crypto

- Receive airdrops

NOT taxable:

- Buying crypto with fiat

- Transferring between your own wallets

- Gifting (up to limits)

Calculating Gains

Gain/Loss = Sale Price - Cost Basis

Cost basis includes: purchase price + fees

Short-term: Held less than 1 year (ordinary income rates)

Long-term: Held more than 1 year (lower capital gains rates)

Record Keeping

Track every transaction:

- Date of purchase

- Amount purchased

- Price paid (USD)

- Fees

- Date of sale

- Sale price

Tools

Tax Software: Koinly, CoinTracker, TaxBit

What they do: Import transactions from exchanges/wallets, calculate gains

Tips

- Export CSVs from exchanges regularly

- Don't wait until tax season

- Consider tax-loss harvesting

- Keep records for 7+ years