How can I know if it's a taxable event?

When a crypto asset is exchanged for cash or another cryptocurrency, or when you use your cryptocurrency to acquire or pay for goods or services, is generally a taxable event.

Taxable transactions can include:

  • Exchanging cryptocurrency for fiat money, or “cashing out”
  • Paying for goods or services
  • Exchanging one cryptocurrency for another cryptocurrency
  • Receiving mined or forked cryptocurrencies

The following are generally not taxable events according to the IRS:

  • Buying cryptocurrency with fiat money
  • Donating cryptocurrency to a tax-exempt non-profit or charity
  • Making a gift of cryptocurrency to a third party
  • Transferring cryptocurrency between wallets

    DISCLAIMER: This post is for informational purposes only and should not be interpreted or relied upon as a substitute for the advice of financial, legal, or tax professionals. This content also only addresses U.S. federal income tax consequences for U.S. citizens and residents and does not address tax consequences that may be relevant to a particular person subject to special rules, such as dealers or traders. You should consult with your own financial, legal, or tax professionals to report and file your crypto taxes or make decisions on your particular circumstances. The laws, regulations, or interpretation of the existing laws could change, which may adversely affect either prospectively or retroactively. The content of this post is subject to changes.