IRS rules crypto-to-crypto swaps as taxable events, forms required for 2025

Exchanging one digital asset for another—known as a crypto swap—can trigger tax implications for U.S. investors, even when U.S. dollars are not involved. The Internal Revenue Service (IRS) treats such swaps as taxable disposals, which may result in capital gains or losses on the asset given up during the exchange. Taxpayers must compare the adjusted basis of the cryptocurrency disposed of with the fair market value of the asset received, minus any allowable transaction fees, to calculate gains or losses. Accurately recording the value, acquisition cost, transaction fees, and dates involved is essential for proper tax reporting. Taxable crypto swaps must be reported in the year the exchange takes place.

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