I'm curious to know how regulated (or unregulated) income from crypto-currencies is whether it's from mining or asset appreciation. Would you owe capital gains taxes? Is this still a very gray area in terms of the US financial industry?

  • 2
    It is taxed, the guidelines are fairly clear, there are some links on the topic in my answer to this question: money.stackexchange.com/questions/79307/… I believe this FAQ is the most pertinent of the links: irs.gov/pub/irs-drop/n-14-21.pdf
    – Hart CO
    Commented Jul 2, 2017 at 5:25
  • @HartCO It is taxable. Whether or not it's taxed presumably depends whether you declare it on your tax return, since the IRS won't get any other reports of your Bitcoin activity.
    – Mike Scott
    Commented Jul 3, 2017 at 9:28
  • @MikeScott That feels a bit pedantic, the activity is taxed, whether you pay that tax or not depends on whether or not you declare it and pay it.
    – Hart CO
    Commented Jul 3, 2017 at 15:07
  • @MikeScott Unless you ever use an exchange at any time in your life. Then your deliberate omission of cryptocurrency on your taxes is going to be a huge problem
    – CQM
    Commented Jul 3, 2017 at 15:09

2 Answers 2


Mining is income at the value at time of earning, I would use an index like XBX to determine price.

Asset appreciation is capital gains.

These aspects of crypto-assets are not a gray area in the US financial sector, and have been addressed for almost half a decade now.

  • Until March 25, 2014, it was a gray area in the United States. For example, it was not clear whether bitcoin was taxed as property or as currency. There are still many gray areas such as whether trading bitcoin for litecoin can be a like kind exchange or whether these two assets simply are not of like kind. Commented Jul 6, 2017 at 9:34
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    I thought that it was made clear that Bitcoin to Litecoin was not like kind. Is that still up for debate?
    – Alex B
    Commented Feb 12, 2018 at 8:22
  • @AlexB if you are filing taxes for income earned in 2017 or before then no it is not clear and likely never will be. The irs has few resources to bother and Congress changed the law completely for like-kind income earned in 2018 and beyond. As of time of writing, nobody is filing taxes for 2018 like-kind income yet until 2019
    – CQM
    Commented Feb 12, 2018 at 14:52

Yes. The guidance the IRS has offered is in Notice 2014-21. Specifically

Q-1: How is virtual currency treated for federal tax purposes?

A-1: For federal tax purposes, virtual currency is treated as property. General tax principles applicable to property transactions apply to transactions using virtual currency.

In short, this means that you're taxed on capital gains whenever you sell or exchange it (e.g. when you buy something with it) based on its cost basis (how much you paid to acquire it, whether in exchange for money, other property, or services). The doc gives several examples and is worth a full read, but with respect to mining in particular:

Q-8: Does a taxpayer who “mines” virtual currency (for example, uses computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger) realize gross income upon receipt of the virtual currency resulting from those activities?

A-8: Yes, when a taxpayer successfully “mines” virtual currency, the fair market value of the virtual currency as of the date of receipt is includible in gross income. See Publication 525, Taxable and Nontaxable Income, for more information on taxable income.

There are still some area for which the American Institute of CPAs have asked for additional guidance, but there is no question that income derived from mining or asset appreciation should be taxed in the eyes of the IRS.

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