CoinLedger’s “Crypto Taxes: The Complete Guide (2025)”

✅ Key Takeaways

In the U.S., crypto assets are taxed as property. You owe income tax when you earn crypto (staking, mining, airdrops) and capital gains tax when you dispose of crypto (selling, trading, or using it).
Your tax rate depends on holding period and total income. Short-term (<12 months) gains are taxed at ordinary income rates (10–37%), while long-term (≥12 months) gains may pay lower rates (0–20%).
Some transactions are not taxable events, such as buying crypto with fiat and holding it, or transferring crypto between wallets you control.

Capital gains event: Occurs when you sell, trade one crypto for another, or use crypto to buy goods/services.
Income event: Occurs when you earn crypto value (mining, staking rewards, airdrops, referrals) at fair market value on receipt.

To compute capital gain/loss: Proceeds – Cost Basis. Different acquisition prices may use methods like FIFO, LIFO, or HIFO.

Example: FIFO is the default method; specific methods like LIFO/HIFO require identifying each crypto unit.

Mining & staking: treated as income at receipt; later disposal may trigger capital gains.
Airdrops/forks: receipt is income; disposal triggers capital gain/loss.
DeFi, liquidity provision, NFTs, DAOs: treated like standard crypto rules; conservative reporting recommended.

Capital gains: report on IRS Form 8949.
Crypto income: report on Schedule 1 (hobby/investor income) or Schedule C (business/mining).
Record-keeping: accurate records essential, as exchanges report transactions and blockchain analysis is used.

Hold assets >1 year to benefit from lower long-term capital gains.
Tax-loss harvesting: use crypto losses to offset gains and up to $3,000 of ordinary income.
Donating crypto to charity: can avoid disposal event and may provide deduction based on fair market value.

For more information, log in to CoinLedger to manage your crypto taxes and track your portfolio efficiently.