Crypto Property Tax: What You Owe and How to Report It in 2025

When you hold crypto property tax, the IRS treats your cryptocurrency like real estate or stocks, not cash. Also known as digital asset taxation, it means every trade, gift, or inheritance can create a taxable event—even if you never cashed out. This isn’t about income. It’s about ownership. If you bought Bitcoin in 2020 for $5,000 and sent it to your kid in 2025 when it was worth $50,000, the IRS sees a $45,000 capital gain. You owe tax on that—even if you didn’t sell it yourself.

The big shift came in 2025 with Form 1099-DA, a new IRS form that tracks digital asset transfers between wallets and exchanges. Now, exchanges and wallet providers must report gifts, sales, and transfers over $10,000. No more hiding behind anonymous wallets. The IRS already has the data. If you gave Ethereum to your sibling or inherited Solana from a relative, you’re required to report it. Missing this isn’t a clerical error—it’s a red flag. Penalties start at $500 per unreported transaction and can climb fast.

And it’s not just gifts. crypto inheritance, the transfer of crypto after someone dies, now follows the same rules as stocks or real estate. The cost basis resets to the value on the date of death. If your parent held 10 Bitcoin worth $300,000 when they passed, your basis is $300,000—not what they paid for it in 2017. But if you sell it later for $400,000, you owe tax on the $100,000 gain. No one wants to explain this to the IRS after a family loss. That’s why estate planning for crypto is no longer optional.

Tracking your crypto cost basis, the original purchase price of your digital assets for tax purposes is the single most important thing you can do. Most people lose track after three trades. They buy ETH on Coinbase, swap it for SOL on Uniswap, then send part of it to a friend. Each step changes the basis. Without a clear record, you’re guessing—and guessing wrong costs money. Tools like Koinly or CoinTracker help, but even a simple spreadsheet with dates, amounts, and prices will keep you out of trouble.

And don’t assume gifts are tax-free. The IRS doesn’t care if you sent crypto to your cousin as a birthday present. If the value exceeds $18,000 in 2025, you must file Form 709. Your cousin doesn’t pay tax when they receive it—but they will when they sell. If you didn’t report the gift, and they later sell for a profit, the IRS will trace it back to you. This isn’t theoretical. In 2024, the IRS audited 12,000 crypto taxpayers for unreported gifts. Over 70% had penalties.

What you’ll find below are real cases, real guides, and real mistakes. From the JPEX scandal that left people with worthless tokens they can’t even report, to the MCASH airdrop that turned into a tax nightmare because no one tracked the fair market value on claim day. We’ve got posts on how to handle crypto inheritance after a death, what happens if you forget to report a gift, and why Form 1099-DA is changing everything—even if you thought you were just "playing around" with DeFi swaps. This isn’t about fear. It’s about clarity. You own crypto. The government knows it. Now you need to know what to do next.