How to track and report crypto transactions for tax purposes

How to track and report crypto transactions for tax purposes

As cryptocurrencies and blockchain assets continue to grow in popularity and mainstream adoption, the United States Internal Revenue Service has taken an increasing interest in their taxation.

In the U.S., cryptocurrency is subject to crypto tax and is classified as transactions instead of property or assets. Needless to say, failure to accurately track and report these transactions can result in penalties and fines.

Here is a comprehensive crypto tax guide for tracking and reporting crypto transactions for tax purposes in the United States.

How cryptocurrency is taxed in the U.S.
In the U.S., if you invest in crypto assets, such as nonfungible tokens (NFTs), and transact further for gains, you must be ready for crypto taxation.

Note that buying crypto alone — or its rise or fall in value while it is in your portfolio — isn’t taxable. Taxes are due when you sell, invest or dispose of the asset in any way for gains.

Cryptocurrency is subject to taxation in two ways: capital gains tax and income tax.