BWP TOPICS
Bitcoin Tax
Understand capital gains treatment, cost basis methods, and legal tax strategies for Bitcoin holders.
COMPLETE GUIDE
Bitcoin Tax Basics for 2025
The foundational guide to Bitcoin taxation — capital gains, cost basis, reporting requirements, and what triggers a taxable event.
Understand Bitcoin tax
Capital gains basics
Short-term vs long-term rates and what triggers a taxable event
Cost basis methods
FIFO, LIFO, and specific identification — which method to use
Tax-loss harvesting
How to sell at a loss to offset gains — and repurchase immediately
IRAs and tax deferral
How holding Bitcoin in a tax-advantaged account eliminates annual reporting
Key questions
Is selling Bitcoin taxable?
Yes. The IRS treats Bitcoin as property. Every sale, trade, or spend triggers a capital gains event. Long-term holdings (over 1 year) are taxed at preferential rates of 0%, 15%, or 20%.
Read moreWhat is tax-loss harvesting for Bitcoin?
If Bitcoin drops below your purchase price, you can sell at a loss, claim the loss against other gains, and repurchase immediately. Bitcoin is not currently subject to the wash sale rule.
Read moreDo I need a Bitcoin-specialized CPA?
A general CPA can handle simple sales, but complex situations (multiple exchanges, DeFi interactions, IRA structures) benefit from a professional familiar with digital asset reporting.
Read moreFeatured guides
Featured