How it works
Every disposal of a digital asset is a taxable event: selling for dollars, trading one coin for another, spending crypto on goods or services, and gifting above the annual exclusion. Receiving crypto as income is a separate taxable event: staking rewards, mining, airdrops, and payment for work. Buying crypto with dollars, transferring between your own wallets, and holding are not taxable events, though each still needs a record.
Why it matters
Most unreported crypto is not hidden on purpose; it is coin-to-coin trades and spending that the taxpayer did not realize were sales.
Related: like-kind exchange, capital gains. Read more: how crypto is taxed.
