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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
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  1. TRANSACTION TYPES

Employment income

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Last updated 3 years ago

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If your employer pays you in cryptoassets, the USD equivalent at the date of receipt is ordinary income under US tax law.

Today, a growing number of employees and contractors are being paid in cryptocurrency for work that they provide. Cryptocurrency received from employment or other work you provide would be considered ordinary income under US tax law.

It is taxed at the fair market value at the time you have dominion and control (generally when it is received). It is then reported on your tax return as ordinary income, like a regular pay-check or freelance income (depending on the nature of the income). The IRS will tax you according to your income tax bracket on the income that is received.

Example: Louise gets paid 1 BTC on 01-31-2022 for working at Crypto-corp. When this BTC arrives in her wallet, she checks the current market value of that asset ($50k). $50k is recorded as ordinary income.

The IRS : “A taxpayer who receives virtual currency as payment for goods or services must, in computing gross income, include the fair market value of the virtual currency, measured in U.S. dollars, as of the date that the virtual currency was received.”

Remember - if you use a crypto asset which you received as payment to purchase goods or serviced before exchanging to a fiat currency you will need to follow the rules on '' as well as income.

Employment Income in

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states
Purchases using Crypto
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Example of employment income in Recap