United States

In the United States, cryptocurrencies are classified as property for federal tax purposes by the Internal Revenue Service (IRS), not as currency. This country maintains a regulated environment for digital assets, meaning a clear legal framework exists for their taxation and reporting. Taxpayers with digital asset activity must report it. The Internal Revenue Service (IRS) is the primary body governing crypto taxation, enforcing federal tax laws under the Internal Revenue Code. When buying and selling crypto, gains are subject to capital gains tax. If you hold crypto for one year or less, any gains are considered short-term and taxed at your ordinary income rates, ranging from 10% to 37%. For crypto held longer than one year, gains are long-term and taxed at preferential rates of 0%, 15%, or 20%, depending on your taxable income. High-income taxpayers may also face an additional 3.8% Net Investment Income Tax (NIIT). Income earned from crypto, such as receiving it as payment, is taxed at federal ordinary income rates (10-37%), plus any applicable state taxes. If you are regularly involved in crypto activities for profit, self-employment tax may also apply. There is no federal Value Added Tax (VAT) on crypto trading itself. Corporate profits from crypto are subject to a flat federal corporate tax rate of 21%. Converting crypto to fiat currency or swapping one crypto for another are both taxable events, triggering capital gains or losses based on the difference between the sale proceeds and your initial cost basis. Specific crypto activities have distinct tax treatments. Staking rewards are taxed as ordinary income at their fair market value when you receive them. Similarly, income from mining is taxed as ordinary income upon receipt, and if conducted as a business, you can deduct associated costs like electricity and hardware. Decentralized Finance (DeFi) activities, including swaps, providing liquidity for yields, and lending, are each considered taxable events. NFTs are generally treated as property, subject to capital gains or ordinary income rules. However, some NFTs may be classified as "collectibles," meaning long-term capital gains on their sale could be taxed at a higher rate, up to 28%. Significant changes are coming for reporting. Brokers are mandated to report gross proceeds from crypto transactions starting in 2025 via Form 1099-DA, with basis reporting to follow for 2026 transactions. Additionally, proposed regulations regarding consent requirements for DeFi brokers are expected in March 2026.