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In 2025, cryptocurrency continues to be taxed under the landmark IRS Notice 2014-21, which first classified digital assets as property subject to capital gains (0%–20% long-term; 10%–37% short-term) and ordinary income rules. For the 2025 tax year, the IRS has introduced Form 1099-DA, requiring brokers to report your gross proceeds directly to the government, while also implementing a mandatory wallet-by-wallet method for tracking your cost basis.
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Crypto tax regulations in the United States officially began in 2014. That year, the IRS released Notice 2014-21, classifying cryptocurrency as property for tax purposes. This ruling subjects cryptocurrencies to capital gains taxes, similar to how stocks and other investments are taxed.
| Crypto Activity | Tax Implication |
|---|---|
| Selling cryptocurrency for fiat (USD) | Capital gains tax |
| Trading one cryptocurrency for another | Capital gains tax |
| Using crypto to purchase goods or services | Capital gains tax |
| Receiving cryptocurrency as payment | Income tax (ordinary income) |
| Mining cryptocurrency | Income tax (self-employment or ordinary) |
Dimov CPA offers expert crypto tax services, including:
Anytime you sell, trade, or use cryptocurrency for purchases.
Yes, trading one cryptocurrency for another is taxable.
Yes, mining income must be reported as taxable income.
Refer to IRS Notice 2014-21 for detailed guidance.
Selling crypto for fiat triggers capital gains tax.
Yes, reporting losses can offset gains and reduce taxes.
You may face IRS penalties, interest, and audits.
Crypto tax regulations in the United States officially began in 2014.
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