IRS crypto tax reporting rules: If you bought, sold or traded cryptocurrency or NFTs last year, the IRS wants to make sure you don’t forget about it at tax time.
The Internal Revenue Service is reminding taxpayers that all digital-asset-related income must be reported when filing a 2025 federal income tax return. That means if you made transactions involving cryptocurrency, non-fungible tokens (NFTs), or other digital assets, any income connected to those activities is considered taxable.
The IRS makes it clear that, for US tax purposes, digital assets are treated as property, not currency. On its website, the agency explained that a digital asset is stored electronically and can be bought, sold, owned, transferred or traded.
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It defines a digital asset as any digital representation of value recorded on a cryptographically secured, distributed ledger, such as blockchain, or similar technology, as per IRS.
Examples of digital assets include convertible virtual currencies and cryptocurrencies like Bitcoin, as well as stablecoins and NFTs.
According to the IRS, these assets can have an equivalent value in real currency, act as a substitute for it, and be used to pay for goods and services or traded digitally.
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To help taxpayers stay on track, here is some basic guidance.
First, keep detailed records. If you had digital asset transactions, you should maintain documentation of your purchase, receipt, sale, exchange or any other disposal of those assets, as per a Silive report. It’s also important to know the fair market value of the asset in US dollars at the time of the transaction.
Second, calculate your capital gain or loss. To do that for a digital asset you sold or disposed of, you’ll need to know the type of digital asset, the date and time of the transaction, the number of units involved, and the basis of the asset that was sold or disposed of, as per the Silive report.
What is considered a digital asset?
It’s a digital representation of value recorded on a blockchain or similar technology.
What is a capital gain or loss?
It’s the difference between what the asset was worth when you disposed of it and its basis.
