Do I have to pay taxes on my crypto?

Published on Nov 27, 2024Updated on Dec 17, 20243 min read

It depends on your jurisdiction. Countries and regions differ on how digital assets transactions and holdings are taxed and how they view digital assets in general (money, property, commodity). You should consult a local accountant, tax lawyer, and/or government official for your tax reporting obligations in your home jurisdiction.

If you're a US individual, you have to report gains and losses on each transaction or when you earn digital assets, even if the gain or loss isn't material. The US Internal Revenue Service (IRS) holds you responsible for reporting all income and transactions. You can find guidelines on how to report and pay taxes related to digital assets on the IRS website, including the official virtual currency tax notice.

Not every crypto transaction is taxable. The following activities are generally not considered taxable events:

  • Buying crypto

  • Transferring like-for-like assets between exchanges

  • Gifting crypto excluding large gifts that could trigger other tax obligations

  • Donating crypto, which is tax-deductible

The following crypto activities are generally considered taxable events:

  • Selling crypto for cash

  • Trading one digital currency for another

  • Using crypto as payment

  • Mining or staking crypto

  • Receiving airdropped tokens

  • Getting paid in crypto

We kindly remind all our customers of their responsibility to pay applicable taxes on digital asset trading. Please note that OKX doesn't provide tax advice and isn't responsible for any users' tax obligations. This article is for informational purposes only, and it shouldn’t be considered tax advice or an individualized recommendation. Please consult your tax professional regarding your particular situation and reporting requirements.

How's crypto taxed?

This is a partner post by TaxBit. This material has been prepared for informational purposes only by third-party TaxBit, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors to assess your tax strategy and obligations.

In the US crypto is taxed as property, which is a capital asset. Similar to more traditional stocks and equities, every taxable disposition will have a resulting gain or loss and must be reported on an IRS 8949 tax form. We provide individuals trading on OKX with an IRS Form 1099-B that details the transaction-level activity of every taxable event throughout the year.

What is 8949?

This is a partner post by TaxBit. This material has been prepared for informational purposes only by third-party TaxBit, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors to assess your tax strategy and obligations.

When you sell/trade crypto for a profit or loss, the IRS requires the details of the transaction to be reported on Form 8949, “Sales and Other Dispositions of Capital Assets”.

Form 1099-B summarizes the information that should be included in your IRS 8949. Your Form 1099-B will detail each asset you sell throughout the year. This form reports your cost basis, when available, for the assets you bought and sold on the platform. Your 1099-B will be issued by individual platforms you made disposals on in a given year and is provided to you as well as to the IRS.

Disclaimer
This content is provided for informational purposes only and may cover products that are not available in your region. It is not intended to provide (i) investment advice or an investment recommendation; (ii) an offer or solicitation to buy, sell, or hold digital assets, or (iii) financial, accounting, legal, or tax advice. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances. Information (including market data and statistical information, if any) appearing in this post is for general information purposes only. While all reasonable care has been taken in preparing this data and graphs, no responsibility or liability is accepted for any errors of fact or omission expressed herein. Both OKX Web3 Wallet and OKX NFT Marketplace are subject to separate terms of service at www.okx.com.

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