LogoLogo
Recap HomeIRS Virtual CurrenciesUK Tax GuideSA Tax Guide
  • Cryptocurrency Tax Guide for US Individuals
    • Virtual Currency & Cryptocurrency
    • Who are Recap?
  • CRYPTOCURRENCY TAX
    • Do I Need to Pay Tax on my Crypto?
    • Which Taxes Apply?
      • Capital Gains Tax (CGT)
      • Income Tax
      • Non-Taxable Transactions
    • How Much Tax Will I Pay?
    • Capital Gains Tax
      • Calculating the Capital Gains and Losses
      • Cost Basis Methods
      • Disposal proceeds
        • Non Taxable Events
        • Taxable Events
        • Donating cryptocurrency to a charitable organization
        • Gifting cryptocurrency to another person
    • Income Tax
      • Receiving cryptocurrency from mining
      • Receiving cryptocurrency rewards
      • Forks
      • Airdrops
      • Tax on Tokenswaps and Mainnetswaps
    • Deductibles and Reducing Capital Gains
  • TRANSACTION TYPES
    • 💷Selling Crypto for Fiat
    • 🛍️Purchases using Crypto
    • 🔄Exchanging one crypto for a different crypto
    • 🎗️Donations to Qualified Charities
    • 🎁Gifts
    • 🎈Airdrops
    • 🤝Staking
    • 💸Transfers
    • 🍴Forks
    • ⛏️Mining
    • 👛Employment income
    • 🚨Lost & Stolen Crypto
    • 💧Liquidity Pools
    • 🔮Cryptoasset derivatives (CFDs, Futures and Margin Trading)
    • 💼Crypto Loans
    • 💎Lending Rewards
    • 🪞Reflections Rewards
    • 👥Referral Income
    • 💳Cashback
    • 🎨NFTs (Non Fungible Tokens)
    • 🎮Play-to-earn gaming NFTs
  • Record Keeping
  • Reporting Income and Gains to the IRS and Paying the Tax
Powered by GitBook
On this page
  • What is Cashback?
  • How is Cashback treated for tax?
  • Capital gains on subsequent disposals

Was this helpful?

  1. TRANSACTION TYPES

Cashback

PreviousReferral IncomeNextNFTs (Non Fungible Tokens)

Last updated 3 years ago

Was this helpful?

There has been no official guidance on cashback from the IRS and as such we recommend that you speak with your tax attorney or accountant about the best way to file your return.

What is Cashback?

Some large providers (such as ) offer users a cashback card, which is like a debit card, and can be used to make purchases of goods and services in fiat from most retailers (ie for your groceries, buying a car or a TV).

Cashback rewards are received in cryptoassets (ie in CRO/MCO on crypto.com) for using the cashback card, based on the amount of purchases made with the card.

How is Cashback treated for tax?

Based on the existing guidance, the IRS is likely to consider the “cash-back” rewards as non-taxable “rebates.” The IRS has previously used this treatment for traditional cash-back rewards, points, and airline miles earned through credit cards.

The rationale for this tax treatment is that the rewards are an after the fact discount to the underlying purchase price.

Capital gains on subsequent disposals

It's important to note the cost basis of any assets that you receive as a reward as these may go up or down in value. When these are sold you will create a taxabale event that should be treated for ''.

💳
crypto.com
Capital Gains Tax