Bitcoin and other cryptocurrencies that you buy, sell, mine or use to pay for things can be taxable. Also, if your employer or client pays you in bitcoin or other cryptocurrency, that money is taxable income.

Do you have to pay tax on crypto?

Gifting crypto, even if you do not receive payment for it, is still considered a disposal. As such, it is subject to capital gains tax. If you are on the receiving end, you do not have to pay tax when you receive the cryptocurrency, however if you dispose of it, that is when capital gains tax will be applied.

How much does crypto get taxed?

Your income from crypto transactions will be taxed as short-term gains if you held the asset for a year or less before disposing of it. The federal tax rate for short-term gains is the same as the tax rate for income; currently, it can range from 10% to 37%, depending on your total income.