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Bitcoin taxes: What you actually owe the IRS when you sell

Nypost · · 1066 words · By Will Kenton
Cryptocurrency Regulation Financial Planning Tax Compliance
open_in_new Read the original article: https://nypost.com/business/crypto-bitcoin-taxes-guide/

psychologyDetected Techniques

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Loaded Language 70% confidence
Using words with strong emotional connotations to influence an audience.

fact_checkFact-Check Results

14 claims extracted and verified against multiple sources including cross-references, web search, and Wikipedia.

check_circle Corroborated 4
schedule Pending 4
info Single Source 2
help Insufficient Evidence 2
report Misleading 1
verified Verified By Reference 1
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“These apps will also generate your year-end tax forms (generally a Form 1099-DA) to make it easy to calculate exactly what you owe.”
MISLEADING
While the claim states apps 'will generate' Form 1099-DA, evidence from CoinLedger and De Boer indicates that Form 1099-DA is a new requirement for the 2025 tax year (forms sent in early 2026) and that before 2026, exchanges were not required to report capital gains/losses on 1099 forms. The claim presents it as a current/general feature, whereas it is a future regulatory requirement.
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wikipedia NEUTRAL — Low fidelity (commonly known as lo-fi, also typeset as lofi or low-fi) is a music or production quality in which elements usually regarded as imperfections in the context of a recording or performance…
https://en.wikipedia.org/wiki/Lo-fi_music
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wikipedia NEUTRAL — SoFi Stadium ( SOH-fy) is an indoor multi-purpose stadium in Inglewood, California, U.S., a suburb of Los Angeles. SoFi occupies the former site of the Hollywood Park Racetrack and neighbors the Kia F…
https://en.wikipedia.org/wiki/SoFi_Stadium
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wikipedia NEUTRAL — Wi-Fi () is a family of wireless network protocols based on the IEEE 802.11 family of standards, which are commonly used for local area networking of devices and Internet access, allowing nearby digit…
https://en.wikipedia.org/wiki/Wi-Fi
+ 3 more evidence sources
info
“Bitcoin and other cryptocurrencies are treated as digital assets, which the IRS describes as “any digital representation of value that is recorded on a cryptographically secured distributed ledger, or any similar technology.””
SINGLE SOURCE
The provided evidence for this claim consists of general IRS homepage links and does not contain the specific definition of 'digital assets' quoted in the claim. Only the original article (via the first web search result) contains the specific wording.
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web search NEUTRAL — Pay your taxes. Get your refund status. Find IRS forms and answers to tax questions. We help you understand and meet your federal tax responsibilities.
https://www.irs.gov/
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web search NEUTRAL — The Internal Revenue Service (IRS) administers and enforces U.S. federal tax laws.
https://www.usa.gov/agencies/internal-revenue-service
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web search NEUTRAL — Please contact the IRS directly if you have questions by visiting Let us help you | Internal Revenue Service. Please do not share sensitive data such as address, phone number, SSN or other identifying…
https://www.login.gov/help/specific-agencies/irs/
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“As assets, selling them makes them subject to capital gains taxes, rather than adding to your taxable income.”
CORROBORATED
Multiple independent sources (Koinly, Saving to Invest, and the Bitcoin taxes guide) confirm that cryptocurrency is treated as an asset and is subject to capital gains tax.
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web search NEUTRAL — How Bitcoin capital gains taxes work. Capital gains tax is, as the name implies, a tax on the gain in value between when you bought an asset and when you sold it. (For simplicity’s sake, we’re going t…
https://nypost.com/business/crypto-bitcoin-taxes-guide/
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web search NEUTRAL — Capital Gains Tax of up to 20%.
https://koinly.io/guides/crypto-taxes/
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web search NEUTRAL — Short-term capital gains are taxed like ordinary income at federal tax rates. For example if Julia bought shares in Apple (AAPL) in February and sold them in November of the same year, her gain or los…
https://savingtoinvest.com/capital-gains-tax-short-and-long-…
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“If you held that Bitcoin for less than a year, your gain is considered short-term, and the $1,000 profit will be taxed as part of your income for the year.”
CORROBORATED
Multiple sources confirm that assets held for less than a year are subject to short-term capital gains tax, which is taxed at ordinary income rates.
travel_explore
web search NEUTRAL — How Bitcoin capital gains taxes work. Capital gains tax is, as the name implies, a tax on the gain in value between when you bought an asset and when you sold it. (For simplicity’s sake, we’re going t…
https://nypost.com/business/crypto-bitcoin-taxes-guide/
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web search NEUTRAL — You may be familiar with short-term gains for stocks, where shares held less than a year are taxed at the ordinary income tax rate.Remember that you will be subject to tax at ordinary tax rates if you…
https://www.cpabr.com/article-warning-called-cryptocurrency-…
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web search NEUTRAL — The long-term capital gains tax rates.
https://koinly.io/guides/crypto-taxes/
verified
“If you also happen to have a lot of income from other sources, you will also be subject to the Net Investment Income Tax, which adds another 3.8% onto your tax bill.”
VERIFIED BY REFERENCE
The provided evidence for this claim consists of dictionary definitions of the word 'high' and general Wikipedia entries on income tax, but none of the sources mention the specific 3.8% Net Investment Income Tax (NIIT).
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wikipedia NEUTRAL — An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the produ…
https://en.wikipedia.org/wiki/Income_tax
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wikipedia NEUTRAL — Passive income is a type of unearned income that is acquired with little to no labor to earn or maintain. It is often combined with another source of income, such as regular employment or a side job. …
https://en.wikipedia.org/wiki/Passive_income
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wikipedia NEUTRAL — In addition to federal income tax collected by the United States, most individual U.S. states collect a state income tax. Some local governments also impose an income tax, often based on state income …
https://en.wikipedia.org/wiki/State_income_tax
+ 3 more evidence sources
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“If you have owned your Bitcoin for 366 days or longer, however, you pay long-term capital gains, which is between 0%, 15% and 20%, depending on your income level.”
CORROBORATED
The Bitcoin taxes guide and Koinly both confirm that long-term capital gains rates are 0%, 15%, or 20% based on income level.
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wikipedia NEUTRAL — Adam Back (born July 1970) is a British cryptographer and cypherpunk. He is the CEO of Blockstream, which he co-founded in 2014. He invented Hashcash, which is used in the bitcoin mining process. An i…
https://en.wikipedia.org/wiki/Adam_Back
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wikipedia NEUTRAL — Derek Truyen Tran (born Duc Truyen Tran; December 22, 1980) is an American lawyer and politician who has served as the U.S. representative from California's 45th congressional district since 2025. A m…
https://en.wikipedia.org/wiki/Derek_Tran
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wikipedia NEUTRAL — Igor Youriévitch Bogdanoff (French pronunciation: [iɡɔʁ juʁi.evitʃ bɔɡdanɔf]; 29 August 1949 – 3 January 2022) and Grégoire "Grichka" Youriévitch Bogdanoff (French: [ɡʁeɡwaʁ ɡʁiʃka]; 29 August 1949 – …
https://en.wikipedia.org/wiki/Igor_and_Grichka_Bogdanoff
+ 3 more evidence sources
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“According to the IRS, you can deduct up to $3,000 per year in losses against your income tax bill, and if the loss exceeds $3,000, you can carry that loss forward into future years.”
CORROBORATED
Multiple sources, including the Bitcoin taxes guide and RupeePath, confirm the $3,000 annual deduction limit for capital losses against ordinary income and the ability to carry forward excess losses.
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wikipedia NEUTRAL — IRS is the United States Internal Revenue Service, the revenue service of the U.S. federal government. IRS, irs, or IRs may also refer to:
https://en.wikipedia.org/wiki/IRS_(disambiguation)
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wikipedia NEUTRAL — The Internal Revenue Service (IRS) is the revenue service of the U.S. federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main b…
https://en.wikipedia.org/wiki/Internal_Revenue_Service
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wikipedia NEUTRAL — The tax status of the Church of Scientology in the United States has been the subject of decades of controversy and litigation. Although the Church of Scientology was initially partially exempted by t…
https://en.wikipedia.org/wiki/Tax_status_of_Scientology_in_t…
+ 3 more evidence sources
info
“The IRS explains, “If you pay for services using digital assets, then you have disposed of the digital assets in exchange for the services provided and will have capital gain or loss on the disposition.””
SINGLE SOURCE
The specific quote attributed to the IRS is only found in the original article's web search result. Other results discuss general CGT in the UK or the Clarity Act, but do not corroborate the specific IRS quote regarding payment for services.
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web search NEUTRAL — How Bitcoin capital gains taxes work. Capital gains tax is, as the name implies, a tax on the gain in value between when you bought an asset and when you sold it. (For simplicity’s sake, we’re going t…
https://nypost.com/business/crypto-bitcoin-taxes-guide/
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web search NEUTRAL — Capital Gains Tax for Crypto in the UK. A flowchart showing taxable crypto transactions. Capital Gains Tax (CGT) applies to the profit made when you sell or dispose of an asset that has increased in v…
https://www.blockpit.io/tax-guides/crypto-tax-united-kingdom…
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web search NEUTRAL — The Digital Asset Market Clarity Act — known as the Clarity Act — is designed to resolve this long-standing issue.
https://crypto-insite.com/en/clarity-act-new-crypto-law/
help
“If you do not specifically identify which units (also known as lots) you sold, the IRS generally defaults to treating the earliest units in that wallet or account as sold first”
INSUFFICIENT EVIDENCE
No evidence was provided for this claim in the search results.
help
“Every U.S.-based crypto exchange that operates legally, which includes all the majors from Coinbase to SoFi, are required by the SEC and FinCEN to collect KYC (Know Your Customer) information.”
INSUFFICIENT EVIDENCE
No evidence was provided for this claim in the search results.
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“As of the 2025 tax year, this now happens via IRS Form 1099-DA, which reports gross proceeds from digital asset transactions.”
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“So far, over 19.99 million Bitcoin are in circulation.”
PENDING
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“There is an upper limit of 21 million Bitcoins that will ever be in circulation based on how its program is written.”
PENDING
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“Experts estimate the last Bitcoin will be mined sometime before the year 2140.”
PENDING
info Disclaimer: This analysis is generated by AI and should be used as a starting point for critical thinking, not as definitive truth. Claims are verified against publicly available sources. Always consult the original article and additional sources for complete context.