Crypto Tax Threshold: What You Owe and When You Need to Pay

When you sell, trade, or spend crypto tax threshold, the minimum amount of cryptocurrency gain that triggers a taxable event in the U.S., you might assume there’s a magic number—like $600—that lets you off the hook. But that’s not how it works. The IRS, the U.S. Internal Revenue Service, which treats cryptocurrency as property for tax purposes. doesn’t care if you made $50 or $50,000. If you had a gain, you owe tax. The $600 rule you hear about? That’s just for exchanges to report transactions to the IRS, not for you to decide if you need to file. You still have to report every trade, even if you broke even or lost money.

Many people think holding crypto is tax-free until they cash out. That’s true—but what counts as "cashing out"? Selling Bitcoin for USD? Taxable. Trading Ethereum for Solana? Also taxable. Buying a coffee with Dogecoin? Taxable. The crypto taxes, the tax obligations arising from buying, selling, trading, or earning cryptocurrency. apply to every single transaction that changes ownership. Even if you didn’t make cash, you might have made a capital gain. And if you earned crypto from staking, airdrops, or mining? That’s ordinary income, taxed at your regular rate the moment you receive it. The IRS crypto rules, the official guidelines issued by the U.S. Internal Revenue Service for reporting cryptocurrency transactions. are clear: no exceptions, no gray zones. If you moved it, you reported it.

Here’s what actually matters: your cost basis and your sale price. If you bought 0.1 BTC for $3,000 and sold it for $4,500? You owe tax on the $1,500 gain. If you traded that 0.1 BTC for 500 SOL and SOL went up? Still taxable. The crypto reporting, the process of documenting and submitting cryptocurrency transaction data to tax authorities. isn’t about how much you made—it’s about whether you changed your holdings. That’s why tools like Koinly or CoinTracker exist. They track every swap, every transfer, every reward. Without them, you’re guessing—and guessing wrong can cost you penalties, interest, or worse.

What you’ll find below isn’t a list of tax loopholes. It’s a collection of real cases—people who got caught, projects that vanished with your tax liability still hanging over them, and airdrops that looked free but turned into tax bills. You’ll see how a dead token like UNN or VALI still triggers a tax event. You’ll learn why the EDOGE airdrop from 2021 isn’t forgotten by the IRS. And you’ll understand why even a failed exchange like MBAex doesn’t erase your records. The crypto tax threshold isn’t a number you hit. It’s a line you cross every time you touch your crypto. The question isn’t whether you crossed it. The question is: do you know where you crossed it?