Mainstream interest in receiving and trading cryptocurrencies has proliferated among individuals and corporations. This article reviews what we know regarding the tax treatment of crypto so far, examines current proposals, and offers expert insight on common questions. This new digital space can be intimidating for the uninitiated and just as confusing for those who hold or plan to trade cryptocurrency
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Owners of multiple crypto “wallets”—where a taxpayer’s cryptocurrencies are digitally stored— should note that transfers between wallets aren’t taxable events, as no assets are transacted with another party.
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The $15,000 gift tax annual limit also applies to gifts of crypto, meaning total gift amounts in a year under that threshold aren’t subject to the gift tax.