Cryptocurrency Tax Guide: Complete IRS Compliance Manual

The IRS treats cryptocurrency as property, creating tax obligations for various crypto activities. This comprehensive guide covers tax treatment, reporting requirements, and compliance strategies for cryptocurrency investors and businesses.

IRS Tax Treatment of Crypto

Cryptocurrency is treated as property for federal tax purposes. Taxable events include selling crypto for fiat, exchanging crypto for crypto, receiving crypto as payment, and earning crypto through mining or staking.

Cost Basis Methods

Understanding cost basis calculation is critical for accurate tax reporting. Methods include FIFO (First In First Out), LIFO (Last In First Out), specific identification, and average cost (for certain circumstances).

International Reporting (FBAR/FATCA)

US taxpayers with cryptocurrency on foreign exchanges may have FBAR and FATCA reporting obligations. Failure to report can result in significant penalties.

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