Which Taxes Apply?
Cryptocurrency is an example of โconvertible virtual currencyโ as it can be digitally traded between users and purchased or exchanged into US Dollars and other real/virtual currencies. The sale, exchange, or use of any convertible virtual currency to pay for goods or services in a real-world transaction has tax consequences.
In the US, most cryptocurrency taxes fall into two categories: capital gains and ordinary income.
Disposal/Activity Type | Capital Gains Tax | Ordinary Income Tax |
---|---|---|
โ๐ท Selling Crypto for Fiatโโ | โ โโ | โ |
โ โโ | โ | |
๐๏ธ Purchases using Crypto | โ โโ | โ |
๐๏ธ Donations to Qualified Charities | โ (If conditions met) | โ |
โ๐ Airdropsโโ | โ | โ |
๐ค Stakingโโโ | โ | โ |
๐ธ Transfersโโ | โโโ | โ |
๐ด Forksโโโ | โ | โ |
โ๏ธ Miningโโโ | โ | โ |
๐โโโโโโ Employment income | โโโ | โ |
๐จ Lost & Stolen Cryptoโ | โ (Potential to claim capital losses) | โ |
๐ง โโโโโโโโLiquidity Pool Rewardsโโ | โโ | โ |
๐ฆ Liquidity Pool Movementsโโ | โ โโ | โ |
โ โโโโโโ | โ | |
๐ผ Crypto Loansโโ | โ | โโโ |
๐โโ Lending Rewardsโโโ | โ | โ |
๐ช Reflections Rewardsโโ | โ | โ |
๐ฅ Referral Incomeโโโ | โ | โ |
๐ณ Cashback | โ | โ |
โโโโโโ๐จ NFTs (Non Fungible Tokens) | โ | โ (for creators) |
๐ฎ NFTs earned playing gamesโโ | โโโ | โ |
๐ Spouse Transfers | โ (if conditions met) | โ |
๐ Giftsโโ | โ (if conditions met) | โ |
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