Cryptocurrency Tax: What You Need to Know About Crypto Reporting and Rules

When you buy, sell, or trade cryptocurrency, digital assets like Bitcoin and Ethereum that operate on decentralized networks. Also known as crypto, it is treated as property by the IRS, not currency. That means every trade, sale, or even using crypto to buy coffee can trigger a taxable event. You don’t need to be a millionaire to owe taxes—just owning and moving crypto opens the door.

Crypto income, earnings from staking, airdrops, or mining. Also known as crypto rewards, it counts as ordinary income the moment you receive it. If you earned 0.5 ETH from staking in January and it was worth $1,200 then, you owe tax on $1,200—even if you never sold it. Same goes for airdrops: if you got 100 tokens worth $50 at the time they hit your wallet, that’s taxable income. The IRS doesn’t care if you didn’t cash out. They care about when you got it.

Crypto reporting, the process of tracking and disclosing your crypto transactions to the IRS. Also known as crypto tax filing, it’s not optional anymore. Exchanges like Coinbase and Kraken now send 1099 forms. But if you used a self-custody wallet, moved crypto between exchanges, or traded on a decentralized platform, you’re still responsible. You need to track every transaction: buy price, sell price, date, and fees. Missing one trade can trigger an audit. Tools like Koinly or CoinTracker help, but you’re still on the hook for accuracy.

Staking rewards, NFT sales, DeFi swaps, and even swapping one crypto for another—all are taxable. A lot of people think, "I didn’t cash out to dollars, so it’s not real income." But the IRS doesn’t see it that way. Selling Bitcoin for Ethereum? Taxable. Buying a NFT with ETH? Taxable. Using Bitcoin to pay for a hotel stay? Taxable. Every move creates a capital gain or loss. If you held it less than a year, it’s short-term gain—taxed at your regular income rate. If you held it over a year, you get the lower long-term capital gains rate.

People think crypto tax is only for traders. It’s not. If you got paid in crypto, got airdropped tokens, or even received crypto as a gift you later sold—you’re in the system. And if you lost crypto to a hack or scam? You might be able to claim a loss, but the rules are strict. You need proof of ownership and proof of loss. No screenshots of a Reddit post. You need transaction IDs, wallet addresses, and official records.

There’s no way around it: if you’ve touched crypto in the last few years, you’ve probably already owed taxes. The IRS has matched data from exchanges. They’re auditing. And they’re not going away. The good news? You don’t need to be a tax expert to get it right. You just need to track your moves, know what counts as income, and understand that every transaction leaves a trail.

Below, you’ll find real guides on how staking pools affect your tax bill, how crypto governance tokens trigger reporting, and how altcoin season swings can change your capital gains. You’ll see how gas fees, token standards, and even deepfake scams tie into your crypto tax reality. No theory. No fluff. Just what you need to stay compliant and avoid surprises.