Investing in Crypto or Bitcoin? You have tax implications In 2025
The IRS is introducing Form 1099-DA to standardize reporting of cryptocurrency and digital asset transactions by U.S. custodial exchanges starting with the 2025 tax year. Brokers will initially report gross proceeds, with cost basis reporting becoming mandatory later, and investors should maintain detailed records as the form may not include all necessary tax filing information.
- Capital gains tax applies when selling crypto for profit, with rates depending on holding period (short-term vs. long-term).
- Income tax applies to crypto earned through mining, staking, or receiving it as payment.
- Tax authorities require reporting of crypto transactions, and exchanges must issue Form 1099-DA.
- Tax rates vary based on income and filing status.
- Proper record-keeping and consulting a tax professional can help navigate crypto tax obligations.