CoinLedger

Crypto Tax Crash Course (USA) — Simple & Actionable Selling, swapping, or spending crypto = taxable event. Even BTC → ETH counts as selling BTC. Every one of these goes on Form 8949 as a capital gain or loss. 2. Income-Based Crypto (taxed the day you receive it) These are taxed at fair market value (FMV) the moment they hit your wallet: Staking rewards, Mining rewards, Airdrops, Referral/sign-up rewards, Play-to-earn tokens, Liquidity, mining/yield rewards Later, when you sell these tokens, that triggers a second taxable event (capital gain/loss). 3. Wallet-to-wallet transfers are NOT taxable. Just mark them as self-transfers so your tax tool doesn’t mislabel it as a sale. 4. NFT Taxes NFTs are taxed almost the same as crypto: Buying an NFT Buying with ETH/SOL = taxable (because spending crypto counts as a sale). Buying with USD or stablecoins = NOT taxable. Selling an NFT Triggers capital gain/loss based on your cost basis. Minting NFTs Usually not taxable unless you receive something with clear FMV. NFT Royalties Counted as ordinary income. 5. DeFi Taxes Some common DeFi actions do create taxable events: Swaps on DEXes Treated as trades → capital gain/loss. Providing Liquidity If you receive an LP token for your deposit, the IRS sees it as trading your crypto for a new asset → taxable event. Removing Liquidity You’re effectively swapping one asset for another → taxable. Yield/Rewards from LP pools, nodes, staking, etc. Counted as income at FMV on the day you receive it. Bridging Assets: Not taxable if the asset stays the same. But wrapped assets (or bridges that issue a new token) can be taxable. (this can be gray area. reach out if questions) 6. Cost Basis Is King Cost basis = what you originally paid for the asset. If you lose it, the IRS assumes you bought the crypto for $0 → meaning 100% profit on every sale. That means massive overpaying. Track it or regret it. 7. Use a Crypto Tax Tool (seriously) Pick an IRS-compliant tool built for U.S. crypto taxes. It will: Auto-import exchange + wallet data Track cost basis properly Detect self-transfers Handle DeFi + NFTs Generate Form 8949 + full tax reports Save you hours (or days) of manual cleanup Even casual traders benefit from using one. Crypto is fun when you’re clicking buttons. It gets messy when you have to explain those clicks to the IRS. Tax season is not a nightmare. Poor tracking is. Good luck for the upcoming tax season. I hope this helps.