If you held cryptocurrencies for a year or less before selling them, you'll face higher rates, between 10% and 37%. If you owned the cryptocurrency for more than a year, your rates will range from 0% to 20%. Your total revenue for the year. Higher tax rates apply to those with the highest incomes.
For federal tax purposes, digital assets are treated as property. The general tax principles applicable to real estate transactions apply to transactions that use digital assets. You may need to declare your digital asset activity on your tax return. Since the IRS considers cryptocurrencies as assets, they cause tax events when used as payment or collected.
When you make a profit, sell, trade, or use cryptocurrencies whose value has increased, you must pay taxes on that profit.