How is Crypto Taxed? 2025 US Crypto Tax Guide

Nearly 40 million Americans now own crypto—every transaction could trigger a tax bill. So, how is crypto taxed in the US for 2025? Understanding the latest IRS rules can help you avoid nasty surprises and file your taxes confidently. In this comprehensive guide, you'll learn how cryptocurrency is taxed, which events count as taxable, current rates, reporting forms, and practical examples. We'll also cover advanced topics like NFTs, DeFi, and how OKX makes recordkeeping easy with downloadable reports and software integrations. Stay informed and compliant with this up-to-date crypto tax resource!

How Is Cryptocurrency Taxed in the US?

Cryptocurrency has become a major investment vehicle, but the IRS treats crypto very differently from traditional money. If you're wondering how is crypto taxed, it's crucial to grasp the basics: the IRS considers crypto "property"—not currency.

IRS Guidance on Crypto Taxes

Since 2014, the IRS has held that cryptocurrencies like Bitcoin and Ethereum are taxed as property. IRS Notice 2014-21 and Revenue Ruling 2019-24 outline the core rules: selling or exchanging crypto can result in capital gains or losses, while mining, staking, and some rewards are taxed as ordinary income. For 2025, new clarifications emphasize that all U.S. taxpayers must answer the crypto question on Form 1040 and accurately report all taxable transactions.

General Principles of Crypto Taxation

Because crypto is classified as property, not all transactions are treated the same.

• Capital Gains/Losses: Selling, trading, or spending crypto triggers a capital gain or loss depending on the profit relative to your cost basis.
• Ordinary Income: Earning new coins via mining, staking, or airdrops is taxed as income at the time received.

A taxable event occurs any time you dispose of or receive crypto in exchange for goods, services, or another asset type. 💡 Pro Tip: Use OKX’s transaction history export to quickly identify taxable events for each tax year and clarify your obligations.

What Crypto Events Are Taxable? (vs. Not Taxable)

Understanding which crypto activities are taxable will help you prevent expensive mistakes.

Taxable Events (with Examples)

Here’s a quick chart of common taxable crypto events and real-world examples:

Non-Taxable Events

Some crypto activities do not trigger taxes:

• Buying crypto with USD (no disposition takes place)
• Transferring crypto between your wallets (ownership unchanged)
• Hodling/holding crypto
• Gifting crypto below IRS threshold

Example edge case: Moving 1 BTC from your OKX account to your hardware wallet is not a taxable event.

OKX’s downloadable account statements clearly distinguish between taxable events (like sales and trades) and non-taxable transfers, making reporting much simpler.

Crypto Capital Gains: Short-Term vs. Long-Term

Capital gains taxes on crypto depend on how long you hold before selling. Here’s the crucial distinction:

• Short-term: Held for 12 months or less
• Long-term: Held for more than 12 months

What is a Capital Gain or Loss?

A capital gain occurs when you sell crypto for more than your cost basis (purchase price + fees). A loss happens when you sell for less.

Example

• Buy 1 ETH at $2,000
• Sell it 8 months later at $2,500 → $500 short-term gain (higher rate)
• Sell it 15 months later at $2,500 → $500 long-term gain (lower rate)

OKX provides trade history exports to help you precisely track dates and amounts for each asset.

2025 Crypto Short-Term Capital Gains Tax Rates

Short-term gains are taxed as regular income:

State taxes may apply as well.

2025 Crypto Long-Term Capital Gains Tax Rates

Long-term crypto gains get favorable federal tax rates:

Scenario Calculation

If you bought Bitcoin a year ago for $20,000 and sold it in 2025 for $50,000, and your total taxable income is $60,000, your $30,000 gain is taxed at 15% federally.

💡 Pro Tip: Use OKX’s CSV trade export to easily determine your holding periods and applicable tax rates!

When Is Crypto Taxed as Income?

Certain crypto activities do not result in capital gains, but are instead taxed as ordinary income. The most common scenarios are mining, staking, airdrops, and some DeFi rewards.

Mining and Staking

When you mine coins or earn staking rewards, the IRS treats the fair market value of the crypto at the moment you receive it as taxable income. This should be included on your tax return and may be subject to self-employment tax if mining as a business or as a sole proprietor.

Example

• Mine 0.1 BTC on July 1, 2025, when BTC is $40,000
• You must report $4,000 as ordinary income

OKX’s mining and staking dashboards show when and how much you’ve earned, and let you export records at tax time.

Airdrops and Hard Forks

Airdrops and hard forks are also taxed as income based on their fair market value on receipt. For example:

• Receive an airdrop of 100 coins on December 15, 2025, valued at $2 each
• $200 total is reported as income

After the initial income event, any further sale or trade of these coins would be subject to capital gains tax based on their original (income) basis.

How to Calculate Crypto Taxes: Examples & Tools

Tax calculations for crypto aren't as scary as they seem if you stay organized. Here’s a practical step-by-step guide.

• Capital Gains/Loss: Sale Price – Cost Basis = Gain or Loss
• Offsetting Losses: Used to reduce overall taxable gains, up to $3,000/year against ordinary income
• Income: Value of mined, staked, or airdropped coins when received

Sample Crypto Tax Scenarios

1. Investor who buys and sells once:
   • Buy 1 ETH at $2,000, sell for $3,000 → $1,000 gain
2. Active day trader:
   • 20 trades in a year, $5,000 cumulative gains, $2,000 losses → Net $3,000 taxable gain
3. Crypto miner:
   • Earn 0.5 BTC worth $20,000, sells later for $28,000
     • $20,000 reported as ordinary income
     • $8,000 capital gain on later sale

Best Crypto Tax Software & Services [2025]

OKX’s tax report exports work with all major crypto tax solutions—download your data, import, and watch the calculations update instantly.

NFTs, DeFi & Advanced Crypto Tax Scenarios

New crypto products can create complicated taxes. Here’s an overview:

• NFTs: Minting, selling, or trading NFTs is taxable; gains/losses are capital events. Airdropped NFTs are ordinary income.
• DeFi: Yield farming, liquidity pool (LP) rewards, and lending/borrowing produce taxable income. Lending interest is ordinary income; swapping LP tokens can generate a gain/loss.
• IRS 2025 Guidance: The IRS continues to clarify but gaps remain (especially in cross-chain bridges and new yield primitives).

For tracking, OKX’s NFT and DeFi dashboards enable one-click exports, helping you stay organized across these rapidly evolving activities.

How to Report Crypto on Your Tax Return (Step-by-Step)

Correctly reporting crypto activity is essential for IRS compliance. Here’s how to get it right:

1. Answer the crypto question on IRS Form 1040
2. Report gains/losses on Form 8949
3. Summarize totals on Schedule D
4. Include income (mining, staking, airdrops) on Form 1040, Schedule 1, or Schedule C (self-employment)
5. Reference any 1099-B/1099-MISC/1099-NEC forms received

OKX’s downloadable tax report makes all this easy. Export your trade/income summary for plug-and-play use with Koinly, TurboTax, or your accountant.

Crypto Tax Recordkeeping & IRS Compliance

Accurate records are your best defense in the event of an audit. Every transfer, trade, or bonus should be tracked for at least 3-7 years. Use:

• Spreadsheets: Manually log buys, sells, dates, values, fees
• Crypto tax tools: Automate tracking across wallets/exchanges

💡 Pro Tip: Always download your OKX transaction and tax reports each year—even if you aren’t selling today!

Store backups securely. Be prepared to show proof of cost basis, receipts, and all transaction details if the IRS requests them.

Advanced: State & Multi-Jurisdiction Crypto Tax Issues

Crypto tax isn't just a federal issue.

• State taxes: Each U.S. state can set different tax rules for crypto—some follow federal guidelines, others impose capital gains taxes or have special requirements.
• Moving between states: You may need to file in multiple states if you moved mid-year. Split income/gains based on residency.
• International: U.S. residents must report worldwide crypto gains—even if you use foreign exchanges.

OKX’s export options allow you to filter by region and timeframe, simplifying multi-jurisdiction compliance.

Frequently Asked Questions

How is crypto taxed?

Crypto is taxed as property. Sales, trading, or spending results in capital gains taxes; mining, staking, and airdrops are taxed as income using fair market value at receipt, per current IRS rules.

How much is crypto taxed?

Short-term capital gains (held ≤12 months) are taxed at your income tax bracket: 10–37%. Long-term capital gains (held >12 months) are taxed at 0%, 15%, or 20%, based on annual income. Crypto income gets added to ordinary income and taxed accordingly.

What forms do I need to report crypto taxes?

You'll usually need: IRS Form 1040 (crypto question), Form 8949 for transaction details, Schedule D for totals, and potentially 1099-B/1099-MISC/1099-NEC if you received one from exchanges or clients.

Do I pay taxes for moving crypto between wallets?

No, simply transferring crypto between your own wallets or accounts is not a taxable event. Tax only applies when you sell, trade, or otherwise dispose of your crypto.

Can I deduct crypto losses?

Yes, capital losses may offset any crypto or investment gains, and up to $3,000 in excess losses per year may be deducted against regular income on your tax return. Remaining losses can be carried forward to future years.

How are NFTs and DeFi taxed?

NFTs are taxed as property and generate capital gain/loss when sold or traded. DeFi yields (interest/yield farming rewards) are taxed as income when earned. Disposing DeFi assets triggers a capital gain or loss.

What if I use crypto tax software?

Crypto tax software lets you automate calculation, organize your transactions, and export IRS-ready forms. Most major tools—like Koinly or TurboTax—integrate easily with OKX downloads.

Conclusion

Before you file your taxes, take stock of your crypto activity. Remember: every buy, sale, trade, reward, or airdrop carries different tax implications. The key to staying compliant is knowing how is crypto taxed, keeping accurate records, and using helpful tools. With tax rates ranging by holding period and activity, recordkeeping matters—a lot! Use OKX’s tax exports and reporting integrations to make tax time smooth. For the best outcome, export your OKX reports and consult a crypto-savvy tax professional.

This article is for informational purposes only and does not constitute tax or investment advice. Cryptocurrency investments and trading carry risks. Always consult a tax advisor, and secure your accounts with strong passwords and 2FA. Learn more in our cryptocurrency trading guide, check out crypto wallet security, or try OKX tax reporting tools for easier compliance.