What Is Cryptocurrency Income (Taxes)?

The IRS treats cryptocurrency as property, not currency — so most crypto transactions trigger a taxable event. Selling, trading, or spending crypto can result in a capital gain or loss. Mining crypto or receiving it as payment is taxed as ordinary income at the fair market value on the day you received it. You must answer the crypto question on your Form 1040 regardless of whether you had transactions. Keep records of every transaction: date, amount, and value at the time.