The tax treatment of crypto assets depends on how investors transact with them. The sale or other exchange of virtual currencies, as well as the use of virtual currencies to pay for goods or services, or holding virtual currencies as an investment, has tax consequences that generally result in a tax liability. Although some virtual currencies operate like a fiat currency - virtual currencies do not have legal tender status in the US. Cryptocurrency is a type of virtual currency that uses crypto. Virtual currencies are a digital representation of value that function as a medium of exchange, a unit of account or a store of value. The IRS treats virtual currency as property for Federal Income Tax purposes. We'll keep it brief and expand with examples after, but here's the ten-point summary: Understanding how the IRS views cryptocurrency is key to understanding its tax treatment. What does all this mean? There are millions of American investors out there looking for help calculating and filing their crypto taxes - and they’ll be looking at you to help them! How does the IRS view cryptocurrency? We also know that 28.5% of American taxpayers use an accountant to file their taxes, and an additional 8.3% use a brick and mortar company - and we know from our ‘invite your accountant’ feature and the popularity of our crypto accountants directory that crypto investors are even more likely to seek the aid of an accountant to file. Of these investors, 59% say they plan to increase their investment in crypto over the next 6 months. As of March 2022, 50 million (27%) of American adults are either current crypto investors or have previously invested in crypto. Latest research shows that 1 in 4 Americans has invested in cryptocurrencies - proving that even in 2022 with the current bear market, crypto adoption shows no sign of slowing down. Wondering whether it’s worth getting into a new market? The figures on crypto adoption in the US speak for themselves. 
With all that out the way, let’s jump in… How popular is crypto in the USA? Or if you want to help your client gain a better understanding of crypto taxes in the US, we’ve also got our Ultimate Crypto Tax Guide. We’ve linked these at the bottom of the page if you’re looking for a tax guide on a specific exchange.
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Crypto Tax Loss Harvesting: Investor's GuideĪnother great resource is our exchange tax blog posts - a huge collection of posts devoted to understanding how to do taxes with specific exchanges, wallets and blockchains.Not only that, but we’ve also rounded up additional resources you might find useful from the Koinly Crypto Tax Academy - so get bookmarking! However, many traditional accountants are put off expanding into this new market due to a lack of understanding over cryptocurrency - as well as the less than comprehensive guidance from the IRS on the huge variety of transactions and potential tax implications of each.įear not - to get you started we’ve put together all the resources you need in our USA Accountant’s Crypto Tax Guide, with the latest guidance from the IRS. Navigating crypto tax for your clients is a vital skill in 2023 and crypto accountants have never been more in demand. We’ve got everything you need to know in our USA Accountant’s Crypto Tax Guide. Crypto accountants are in high demand in the US - so it pays to know your crypto tax rules. which is why many American crypto investors turn to a crypto accountant to help them come the tax deadline.
The IRS is very clear that crypto is taxed - but navigating the IRS guidance on crypto tax (or lack thereof!) isn’t always easy, especially for individual investors with little knowledge of tax….
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