| Cryptocurrency transaction | Federally taxable? | Details |
|---|---|---|
| Buying a crypto asset | No | Simply purchasing crypto with cash doesn't trigger taxes, but any transaction that results in a sale or exchange is generally a taxable event. |
| Transferring crypto from one account or wallet to another | No | Generally, you don't owe taxes when you transfer crypto between accounts or wallets that you own. |
| Selling a crypto asset | Yes | You may owe either short- or long-term capital gains tax, depending on your holding period, on the difference between the sale price—or fair market value (FMV)—and the cost basis of the crypto. |
| Trading one crypto asset for another crypto asset | Yes | The IRS treats this as a sale of an asset for its FMV at the date of the exchange. The new asset's cost basis is the FMV of the original asset sold or traded. |
| Using a crypto asset to buy goods or services | Yes | Spending crypto to make a purchase is treated as a sale for tax purposes. The FMV of the crypto asset at the time of the purchase is used to determine the gain or loss. |
| Receiving crypto assets as payment for a product or service | Yes | You must report the FMV or the crypto at the date of the transaction as business gross income. |
| Earning crypto assets as wages | Yes | You must report the FMV of the crypto assets at the time of the payment as taxable wage income on your tax return. You should receive a Form W-2 (for employees) or a Form 1099 (for contractors). |
| Receiving crypto assets as a gift | No | Generally, you won't owe tax at the time of receipt, but taxes will be due if you sell or exchange the cryptocurrency. If the FMV of the gifted assets is above the original owner's cost basis at the date of the gift, your cost basis will typically be equal to the original owner's adjusted cost basis plus any gift taxes paid.* |
| Gifting $19,000 or less (in 2025 or 2026) in crypto assets | No | Gifts covered by the annual gift exclusion are not taxable. |
| Gifting more than $19,000 (in 2025 or 2026) in crypto assets | Maybe | If you use your lifetime estate and gift tax exclusion, the gift will not be taxable. If you do not use the exclusion, you may owe gift taxes on the amount over the annual gift limit. |
| Inheriting a crypto asset | Maybe | If federal gift and estate taxes are due, the estate will pay the taxes, not you. When you receive the crypto asset, you will get a step-up in basis equal to the FMV. Take note, you may owe state inheritance taxes. |
| Mining crypto assets | Yes | Taxes are due at the time you receive the cryptocurrency and are based on the FMV at the date of receipt. You may be able to deduct some expenses related to the mining to offset the gain. |
Disclosure Title
Source:
Disclosure
Schwab Center for Financial Research and irs.gov.
*If the FMV of the gifted asset is below the asset's adjusted cost basis at the date of the gift, another set of rules may apply. Your cost basis will depend on whether you have a gain or loss when you dispose of the asset. Visit the IRS website for more details.