The Internal Revenue Service is reminding taxpayers that they must report all digital-asset-related income when they file their 2025 federal income tax return. So, if you made any transactions with cryptocurrency or non-fungible tokens, or NFTs, it should be noted that income from those digital assets is taxable.
“For U.S. tax purposes, digital assets are considered property, not currency,” the IRS noted on its website. “A digital asset is stored electronically and can be bought, sold, owned, transferred or traded. The tax definition of a digital asset is any digital representation of value recorded on a cryptographically secured, distributed ledger (blockchain) or similar technology.”
According to the IRS, examples of digital assets include convertible virtual currencies and cryptocurrencies, such as Bitcoin, plusStablecoins and NFTs. The agency explained that these digital assets have an equivalent value in real currency, act as a substitute for real currency, and can be used to pay for goods and services or digitally traded.
Here are some tips on reporting the transactions:
- Keep records. If you had digital asset transactions, keep records that document your purchase, receipt, sale, exchange or any other disposition of the digital assets. You should also be aware of the fair market value as measured in U.S. dollars.
- Calculate your capital gain or loss. To calculate the capital gain or loss of a digital asset that you sold or disposed of in a transaction, you’ll need to know: the type of digital asset; date and time of transaction; number of units; basis of digital asset disposed of or sold.
For more information, visit the IRS’ FAQs on virtual currency transactions.