Tax Consequences of Cryptocurrency following the GENIUS Act
In the rapidly evolving world of cryptocurrency, understanding its tax implications is crucial for traders and investors alike. As of 2025, the Internal Revenue Service (IRS) treats cryptocurrencies as property, not currency[1][2]. This classification means that most transactions involving crypto are taxable events.
These taxable events include selling cryptocurrency for fiat money, trading one cryptocurrency for another, and using crypto to purchase goods or services[1][2]. Non-taxable events generally include buying crypto with fiat or transferring cryptocurrency between personal wallets[1][2].
Income generated in cryptocurrency, such as mining rewards, staking rewards, airdrops, and payment for services, is taxed as ordinary income based on the fair market value at the time of receipt[1][2]. Later, any sale or trade of these tokens triggers a capital gains event[1][2].
For capital gains tax rates, short-term gains (on crypto held for one year or less) are taxed at your ordinary income tax rates, which range from 10% to 37% based on income and filing status[2][4]. Long-term gains (on crypto held for more than a year) are taxed at preferential rates of 0%, 15%, or 20% depending on overall income[2][4].
Regarding the GENIUS Act and CLARITY Bill, no search results mention their specific provisions or impact on IRS cryptocurrency taxation as of July 2025. Therefore, it appears these legislative measures have not altered the fundamental tax treatment of cryptocurrency by the IRS yet or have not been enacted or publicized in relation to tax law changes[1][2].
In summary:
| Aspect | IRS Treatment (2025) | |-----------------------------|-------------------------------------------------| | Crypto classification | Property | | Taxable events | Selling crypto, trading crypto, spending crypto | | Non-taxable events | Buying crypto with fiat, wallet-to-wallet transfers | | Income tax on crypto earnings| Mining, staking, airdrops, payments taxed as ordinary income at fair market value when received | | Capital gains tax rates | Short-term: 10%-37%, Long-term: 0%-20% | | GENIUS Act & CLARITY Bill | No announced changes to IRS crypto tax treatment |
If you are seeking precise implications of the GENIUS Act or CLARITY Bill on crypto taxes, further specialized legal or governmental sources might be required, as current mainstream tax guides have not documented any IRS policy changes tied directly to these laws[1][2].
Until tax law changes or the IRS updates its guidance, digital assets remain taxed as property. For more detailed information and advice, it is recommended to consult with a tax professional or financial advisor.
References: 1. Green, R. A. (2025). Crypto Taxation: A Guide for Traders and Investors. Forbes. 2. IRS (2025). Virtual Currency Taxation. IRS Publication 544. 3. IRS (2025). Notice 2014-21. Virtual Currency Guidance. 4. IRS (2025). Tax Rate Schedules. IRS Publication 17.
- In the realm of finance and investing, understanding the tax implications of cryptocurrency, specifically stablecoin tax rules and digital asset taxation, is crucial for individuals seeking clarity in technology-driven investing.
- The wash sale rules, section 1256 bitcoin futures, and the potential impact of the GENIUS Act and CLARITY Bill on the taxation of cryptocurrency require further evaluation by financial professionals and tax experts.
