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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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  • Tax treatment
  • Income Tax
  • Capital Gains Tax
  • Referral Income in Recap

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  1. TRANSACTION TYPES

Referral Income

PreviousReflections RewardsNextCashback

Last updated 3 years ago

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Tax treatment

There has been no official guidance on Referral Income 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.

Income Tax

Although there is no guidance from the IRS, we assume that referral income should most likely be taxed as income as it typically would not amount to financial trading activity.

Where the referral income does not amount to a trade, the USD value (at the time of receipt) of any tokens received from referrals will be taxable as ordinary income.

Capital Gains Tax

The USD value of the referral income at the date of receipt is the capital gains tax acquisition cost of the tokens; to be deducted from the proceeds of a later disposal of the tokens subject to capital gains tax.

Referral Income in

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An example of referral income in Recap