Tax reporting

Which transactions involving bitcoin exchanges are taxable events?

Generally, transactions in which you exchange your bitcoin for something else—whether for money, goods, or services—are taxable events. This is because the IRS considers these transactions to be sales of bitcoin.

Transactions involving bitcoin that are taxable events include:

  • Selling your bitcoin for U.S. dollars
  • Buying goods or services with your bitcoin or sending bitcoin to someone as a form of payment

Transactions involving bitcoin that are not generally taxable events include:

  • Buying bitcoin with U.S. dollars
  • Receiving a portion of your paycheck as bitcoin via direct deposit (please note your income itself is subject to income tax)
  • Sending bitcoin to your external bitcoin wallet, or transferring bitcoin between your own wallets
  • Sending bitcoin as a gift to another person, subject to IRS exclusion amounts

Please note that Strike is not aware of your purpose for making any particular bitcoin send out of the Strike app. This includes whether the send was made to transfer bitcoin to a different wallet that you own, to buy goods and services, or to send a gift to a friend. Also, be aware that receiving payment for goods and services in bitcoin may be subject to tax in the same way that commercial activity is taxed. It is your responsibility to ensure that you make complete and accurate reports of bitcoin transactions to the IRS.

Strike does not provide tax advice. These FAQs are for informational purposes only, and they shouldn’t be considered tax advice or recommendations. Please consult a professional regarding the tax implications of trading or transacting in bitcoin.