Cryptocurrency Tax Rules for Immigrants in the US
Updated April 12, 2026
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Quick answer
The IRS treats cryptocurrency as property, not currency. Every sale, trade, or use of crypto triggers a capital gains calculation. Immigrants with crypto on foreign exchanges face additional FBAR and FATCA considerations.
The IRS Treats Crypto as Property
The IRS issued guidance in 2014 classifying cryptocurrency as property for US tax purposes. This means every time you sell, trade, exchange, or spend cryptocurrency, you have a taxable event - just like selling a stock.
The rules apply to US citizens, green card holders, and resident aliens on their worldwide crypto activity, regardless of which country the exchange is based in.
What Counts as a Taxable Event
The following transactions trigger a capital gain or loss calculation:
- Selling crypto for USD or another fiat currency
- Trading one cryptocurrency for another (BTC to ETH, for example)
- Using crypto to pay for goods or services
- Receiving payment in crypto for work performed (this is also ordinary income)
The following are generally not taxable events:
- Buying crypto with USD
- Transferring crypto between wallets you own
- Holding crypto that has increased in value (no sale, no taxable event)
How to Calculate the Gain or Loss
Gain or loss = Sale proceeds - Cost basis
Your cost basis is the fair market value of the crypto in USD on the date you acquired it, plus any fees paid to acquire it. Your proceeds are the fair market value in USD on the date you disposed of it.
Where to Report: Form 8949 and Schedule D
Every taxable crypto transaction must be reported individually on Form 8949. The totals flow to Schedule D. Crypto exchanges that are required to issue 1099s will provide this data, but many foreign exchanges do not - you must track your own records.
The IRS also asks a yes/no question at the top of Form 1040: "At any time during [year], did you receive, sell, exchange, or otherwise dispose of any digital assets?" Answer this honestly.
Short-Term vs. Long-Term Rates
| Holding Period | Rate |
|---|---|
| 1 year or less | Ordinary income rates (up to 37%) |
| More than 1 year | Long-term capital gains rates (0%, 15%, 20%) |
Holding crypto for more than one year before selling qualifies you for the lower long-term rates.
Mining and Staking Income
Mining rewards and staking income are treated as ordinary income - not capital gains - at the fair market value on the date received. This income is subject to both income tax and self-employment tax if you mine as a business.
When you later sell the mined or staked crypto, you have a separate capital gains event based on your basis (the value when received) and the sale price.
Foreign Crypto Exchanges and FBAR
If you hold crypto on a foreign exchange (such as Mercado Bitcoin, Binance, or Coinbase's non-US entity), there may be FBAR reporting requirements. The rules are still developing, but if the account holds cash or has characteristics of a financial account, the $10,000 aggregate threshold for FBAR (FinCEN 114) may apply.
Form 8938 (FATCA) reporting thresholds also apply to foreign financial accounts - check whether your foreign exchange account qualifies.
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Start Free DiagnosticCommon Questions
The IRS classifies cryptocurrency as property. When you sell, trade, or spend crypto, you have a taxable event - a capital gain or loss based on the difference between your cost basis and the fair market value at the time of disposition. Short-term gains (held one year or less) are taxed at ordinary income rates; long-term gains qualify for lower rates of 0%, 15%, or 20%.
It depends on the exchange structure. If the foreign exchange holds crypto in an account that qualifies as a foreign financial account (with a cash balance or certain other features), it may trigger FBAR reporting if the aggregate balance exceeded $10,000 at any point. The FBAR rules for crypto are evolving - consult a tax professional for your specific exchange.
Yes. The IRS treats mining and staking rewards as ordinary income at the fair market value of the crypto on the date you receive it. That value becomes your cost basis. When you later sell the mined or staked crypto, any additional gain or loss is a separate capital gains event.
This article is educational information only. It is not tax, legal, or financial advice. For decisions specific to your situation, consult a licensed CPA or Enrolled Agent.