If you’re considering selling your Bitcoin or any other cryptocurrency, it’s crucial to understand how this transaction could impact your annual taxes.

The process of selling is straightforward. With an account at a prominent exchange or financial institution like SoFi, you have a variety of options for executing trades and managing the proceeds. Furthermore, these platforms typically provide year-end tax documents, such as Form 1099-DA, simplifying the task of determining your tax liabilities.

The IRS classifies Bitcoin and similar cryptocurrencies as digital assets, which they define as “any digital representation of value that is recorded on a cryptographically secured distributed ledger, or any similar technology.”

When you sell these assets, they are subject to capital gains taxes rather than being counted as part of your regular income.

How Bitcoin capital gains taxes work

Capital gains tax applies to the profit you make from the difference in the asset’s value between the time of purchase and the time of sale. While this explanation primarily addresses Federal taxes, it’s worth noting that similar principles often apply to state taxes.

Let’s say you bought some Bitcoin for $1,000. That amount of crypto doubled in value, and you decide to sell the entire stake for $2,000. You will only pay taxes on the gain of $1,000. The other $1,000 you paid for the Bitcoin is your cost basis.

In the U.S., capital gains are taxed differently from income depending on how long you own the asset. 

If you held that Bitcoin for less than a year, your gain is considered short-term, and the $1,000 profit will be taxed as part of your income for the year. If you also happen to have a lot of income from other sources, you will also be subject to the Net Investment Income Tax, which adds another 3.8% onto your tax bill.

If you have owned your Bitcoin for 366 days or longer, however, you pay long-term capital gains, which is between 0%, 15% and 20%, depending on your income level. Of that $1,000 profit, you might own nothing, or at most $200.

What happens if you bought Bitcoin for $1,000 and, by the time you’re ready to sell, the price has fallen to $500? In that case, you have incurred a capital loss, which you can use to deduct against your tax bill. 

According to the IRS, you can deduct up to $3,000 per year in losses against your income tax bill, and if the loss exceeds $3,000, you can carry that loss forward into future years. If you bought $10,000 worth of Bitcoin and the price crashed so that you sold your holdings for $1,000, you could write $3,000 off your income taxes for the year you made the sale and the two years following.

Beware Bitcoin tax any time you “dispose” of the crypto

Because Bitcoin is also a currency, you can use it to buy stuff, and that presents a twist to how your taxes are calculated.

The IRS explains, “If you pay for services using digital assets, then you have disposed of the digital assets in exchange for the services provided and will have capital gain or loss on the disposition.” 

So, in plain English, this means if you use your Bitcoin to buy a Lamborghini, you have to pay capital gains on the difference between the amount of money you paid for Bitcoin and how much more it was worth when you paid for the Lambo.

Example: The “Disposition” Rule

• Step 1: You buy $10,000 of Bitcoin.
• Step 2: Bitcoin value rises to $200,000.
• Step 3: You trade that Bitcoin directly for a car.
• Result: Even though you didn’t “cash out” to a bank account, the IRS views this as a sale. You owe capital gains tax on the $190,000 profit.

When you’re a buy-and-hold investor, your tax situation will likely be fairly straightforward. But if you trade often, or if you use the Bitcoin in your wallet to buy stuff, you will need to keep careful records of all your transactions. 

If you do not specifically identify which units (also known as lots) you sold, the IRS generally defaults to treating the earliest units in that wallet or account as sold first, which could significantly increase your cost basis.

To track your gains, it’s important to keep detailed records of every transaction, including the date, amount of crypto, its U.S. dollar value at the time of the transaction and what wallet or exchange you used for each purchase, sale or exchange. Be sure to keep your accounts at reputable custodians like SoFi for the best customer service.

The more information you have about your Bitcoin transactions, the better prepared you will be to reduce your end-of-the-year tax hit.

To track your gains accurately, maintain records of:

• Transaction Date: When the buy, sale or exchange occurred.
• Asset Amount: The specific amount of crypto (e.g., 0.05 BTC).
• Cost Basis: The U.S. dollar value at the time of purchase.
• Fair Market Value: The U.S. dollar value at the time of sale or “disposition.”
• Platform Details: Which wallet or exchange was used for the trade.

FAQ: Bitcoin taxes

Does the IRS know if you buy Bitcoin?

Yes. Every U.S.-based crypto exchange that operates legally, which includes all the majors from Coinbase to SoFi, are required by the SEC and FinCEN to collect KYC (Know Your Customer) information. As of the 2025 tax year, this now happens via IRS Form 1099-DA, which reports gross proceeds from digital asset transactions.

What happens if I don’t report Bitcoin on my taxes?

Contrary to popular belief, it is relatively easy for governments to track Bitcoin transactions, especially if you’ve traded on an exchange regulated in the U.S. If you don’t pay your taxes, you can be subject to an audit by the IRS, back taxes, fines and even jail time.

How many Bitcoins are left?

So far, over 19.99 million Bitcoin are in circulation. There is an upper limit of 21 million Bitcoins that will ever be in circulation based on how its program is written. As the number of available Bitcoins left to mine decreases, the difficulty of mining them increases, so it takes longer for new Bitcoins to enter circulation. Experts estimate the last Bitcoin will be mined sometime before the year 2140.

The investigation into Democratic Senator L. Louise Lucas was initiated during the tenure of former President Joe Biden’s administration, according to a source familiar with the matter. Both sources, who requested anonymity due to the ongoing nature of the investigation, confirmed this detail.

Although the investigation has navigated through different political administrations, Democrats view it in the context of previous politically charged inquiries during President Donald Trump’s presidency. Lucas, a veteran senator with 34 years of service, played a key role in Virginia’s recent redistricting efforts, a Democrat-led initiative aimed at counteracting Republican redistricting strategies promoted under Trump.

In a statement released in the evening, Lucas asserted, “Today’s actions by federal agents extend beyond the issue of one state senator; they touch on themes of power and who is permitted to wield it for the people.” She further criticized the administration, saying, “What we witnessed aligns with a clear pattern: when faced with opposition, they resort to intimidation and silence those who defy them.”

The FBI has confirmed that it was conducting a court-authorized search in Portsmouth. Such operations require judicial approval, along with investigators presenting probable cause for a crime to be investigated.

The search extended to Lucas’ office, which accommodates her disabilities services enterprise and serves as her political headquarters in Portsmouth. FBI agents, identifiable by their T-shirts, also visited a nearby cannabis store she established in 2021. The entrances to the Cannabis Outlet’s parking area, as well as access to the politician’s office, were blocked by unmarked vehicles with flashing blue lights.

By evening, agents were carrying boxes and bags out of the shop’s back door.

Lucas, a prominent backer of legalizing marijuana, has said the store sells legal hemp and CBD products. It has drawn scrutiny from local media amid allegations that some products were mislabeled.

Virginia has legalized pot possession, but retail sales of recreational marijuana remain illegal in the state.

A woman who identified herself as Lucas’ granddaughter, Nicole Bremby, came by after agents left to check on the Cannabis Outlet. She declined to discuss the raids.

“I’ve had better days,” she said. “It’s all good. Everyone is home.”

Virginia Democrats point to other recent prosecutions

State House Speaker Don Scott said he was deeply concerned by the FBI search.

“Right now, there is far more theatrics and speculation than actual information available to the public,” Scott, a Democrat, said in a statement, adding that more facts were needed “before anyone rushes to political conclusions.”

Gov. Abigail Spanberger declined to comment.

Other Virginia Democrats were quick to note that the search comes as the FBI and Justice Department have opened a spate of investigations into perceived adversaries of Trump.

Last week the Justice Department charged former FBI Director James Comey with making a threatening Instagram post against Trump, an accusation that Comey — who for nearly a decade has drawn the president’s ire — has denied. A court dismissed federal prosecutors’ earlier case accusing Comey of lying to Congress.

A separate mortgage fraud case, also ultimately dismissed by a court, targeted Democratic New York Attorney General Letitia James, who brought a major civil fraud lawsuit against Trump and his business. Both she and Comey, a longtime Republican who split from the party in the past decade, denied the charges and said the prosecutions were vindictive.

Such cases “have undermined public confidence” in federal prosecutors in Virginia, Democratic state Attorney General Jay Jones said in a statement.

The FBI and Justice Department have also provoked concerns among Democrats about ongoing election-related investigations, including the seizure by agents of ballots and other information from Fulton County, Georgia.

Lucas has been a vocal leader of Virginia’s redistricting effort, which voters approved last month. A sign urging people to “vote yes” to “stop the MAGA power grab” still hung Wednesday on a fence separating her office’s parking lot from that of the cannabis shop.

Lucas played a leading role in Virginia redistricting

Amid a national, state-by-state partisan redistricting fight kicked off by Trump’s desire to aid his fellow Republicans, Virginia voters OK’d a Democrat-backed constitutional amendment authorizing new U.S. House districts. The plan could help the party win up to four additional seats.

“We are not going to let anyone tilt the system without a response,” Lucas said after the vote. Trump, meanwhile, denounced the results.

The state Supreme Court let the referendum proceed but has yet to rule on whether the effort is legal. The court is considering an appeal of a lower court judge’s ruling that the amendment is invalid because lawmakers violated procedural requirements.

Voting districts typically are redrawn once a decade, after each census. But Trump last year urged Texas Republicans to redraw House districts to give the GOP an edge in the midterms. California Democrats reciprocated, and redistricting efforts soon cascaded across states.

Lucas, 82, has been a figure in Virginia politics since the 1980s, when she became the first Black woman elected to a city council seat in her native Portsmouth. She now is the first woman and first African American to serve as the Senate’s president pro tempore.

Earlier in life she was the Norfolk Naval Shipyard’s first female shipfitter, according to her biography in the state library. The job entails making, installing and repairing sometimes enormous metal assemblies for vessels.

In recent years she has been the CEO of a Portsmouth business that runs residences, day programs and transportation for intellectually disabled adults.

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The tragic case of a Texas family murder-suicide has been made all the more haunting by a recent social media post from the wife of the deceased. The incident involved the wife, Thy Mitchell, 39, and her two children, Maya, 8, and Max, 4, who were all killed by her husband, Matthew Mitchell, 52, in their $1.2 million home. Authorities confirmed that after committing the murders, Matthew took his own life.

In a chilling twist, just ten days prior to this tragic event, Thy shared a video on her Instagram account that now feels eerily prescient. The post featured her and Matthew together, overlaid with text jokingly stating, “He thinks we will grow old together. He will, but I’m Asian.”

While the clip was likely intended as a light-hearted reference to the longer life expectancy often associated with Asian Americans, it has taken on a darker tone in the wake of the horrific events. Many viewers now find the post unsettling, given the tragedy that unfolded shortly after.

The couple could be seen standing together, with text reading: ‘He thinks we will grow old together. He will, but I’m Asian.’

The short video looks to be a harmless joke about the life expectancy of Asian Americans, but users found it chilling given what has happened since. 

One person commented: ‘The foreshadowing is chilling’, with another adding: ‘If only she knew.’

Another posted: ‘Yet another horrific act of domestic violence. They seemed to have it all. 

‘Why do these men have to wipe out their entire family- those poor little children included?’

Social media users have since said the post to her page was haunting due to her caption over it

Officers said they entered the home to find the family of four dead inside 

The couple owned the restaurant Traveler’s Table in Houston, and Matthew was previously CEO of the Texas Center for Drug Development.

Matthew frequently appeared on his wife’s Instagram alongside their children in what, on the surface, looked to be an idyllic family.

Houston Police Department said they were called to the address shortly after 5:26pm on Monday for a welfare check.

Police said it was a babysitter and a relative of one of the parents who alerted officers after not hearing from the family for over a day. 

Officers said they entered the home to find the parents and their two children dead inside. 

The children were last seen on Sunday and had been found dead in their beds, according Fox News.

Authorities said they were treating the tragedy as a murder-suicide, but have not released any further details about the crime scene. 

The River Oaks community is among the most affluent in Houston, where multi-million dollar homes line the streets. 

The family of four were found inside the address in the 2100-block of Kingston Street, seen here

Authorities said the couple’s two children aged Maya, 8, and Max, 4, were found dead in the home

A neighbor told Click2Houston: ‘I’ve lived in this neighborhood for 19 years and never seen anything like this. We haven’t had these kind of tragedies. 

‘We don’t have robberies. We have incredible constables in this neighborhood, but it’s very sad.’

According to his biography on his restaurant’s website, Matthew studied in France, Italy, and at Oxford University in England, and early in his career, he worked as a journalist in London and New York City. 

When he returned to Texas, he attended Rice University and entered the pharmaceutical industry. 

He was then the President and CEO of the Texas Center for Drug Development, Inc., a clinical research company. 

He went on to open Traveler’s Table with his wife Thy – a restaurateur and board member of the Texas Restaurant Association. 

In September 2025, the couple was named Restaurateurs Of The Year in Houston.

An audacious duo of suspected thieves left employees at a luxurious Arizona steakhouse in disbelief after allegedly snatching a $4,000 bottle of rare cognac. The surprising theft at this upscale venue has left staff members astonished, as they recount never having experienced such a bold heist before.

Security footage from the Three Thirty Three Restaurant in Tempe reveals the precise moment on May 4 when the couple, appearing undisturbed, allegedly executed their plan. The video captures the woman discreetly placing a coveted bottle of Louis XIII cognac into her handbag.

In the surveillance clip, the woman is observed carefully lifting the $4,000 cognac bottle and concealing it in her purse.

“There was no need to steal from us,” expressed John DeVries, a seasoned restaurant professional with over 40 years in the field, during an interview with KSAZ-TV. “You didn’t need to come in and steal. Stealing from me, stealing from this family here, that’s not happening. We’re on you. We’re gonna get you. We’re gonna prosecute you.”

The restaurant’s surveillance footage also captures the woman as she allegedly stashes the expensive liquor bottle in her bag, subsequently fleeing the scene with an accomplice in a black SUV. (Kaos Hospitality Group)

According to staff, the duo’s scheme was anything but spontaneous.

They allegedly booked a table under a fake name and phone number, arrived late and ordered only appetizers before causing minor complaints.

Surveillance video captured the woman allegedly hiding the bottle in her purse while the man blocked the manager’s view. (Kaos Hospitality Group)

The man reportedly blocked the manager’s view while the woman slipped back inside, grabbed the luxury bottle from a rolling service cart and tucked it into her bag.

Moments later, the pair bolted.

The identity of a couple suspected of stealing a bottle of cognac’s is unknown, but they were seen leaving in a black SUV. (Kaos Hospitality Group)

The suspects fled in a black SUV, according to the Kaos Hospitality Group, which owns the restaurant.

Now, the restaurant is asking for the public’s help tracking down the duo behind the heist.

Police have been notified.

In a statement, the Tempe Police Department said the investigation remains ongoing and that it had “no additional information.”

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In a significant legal decision on Wednesday, a U.S. judge permitted the Justice Department to retain 2020 election ballots that were seized during an FBI operation in January. This ruling represents a legal victory for former President Donald Trump’s administration, which continues to promote unfounded claims of extensive voter fraud in the election.

U.S. District Judge J.P. Boulee, based in Atlanta, turned down Fulton County’s motion to reclaim the original copies of the seized documents.

Attorneys representing the county contended that the FBI’s search of its election center was based on faulty and discredited evidence, arguing that it infringed upon constitutional protections.

Judge Boulee acknowledged that there were imperfections in the FBI affidavit used to obtain judicial approval for the search. However, he determined that these deficiencies did not meet the “callous disregard” standard necessary to justify returning the records to the county.

“Although the Affidavit was undeniably imperfect, this is not a case where an officer omitted all facts that could challenge probable cause or deliberately falsified information,” Boulee stated in his comprehensive 68-page decision.

Fulton County intends to “vigorously” pursue all available legal options, the county’s chairman, Robb Pitts, said in a statement, while adding that he disagreed with the judge’s ruling.

Spokespeople for the FBI and the Justice Department didn’t immediately respond to a request for comment.

The ruling is a rare court victory for Trump’s Justice Department in investigations that Trump has demanded.

It will allow the FBI to keep possession of more than 600 boxes of 2020 ballots as it pursues a criminal investigation into whether election records were not properly retained or whether residents in Fulton County, which includes most of Atlanta, were defrauded out of a fair election.

But the investigation still faces significant obstacles.

DOJ lawyers have not identified any individual targets of the probe and have not disputed claims that the statute of limitations appears to have expired on both crimes prosecutors have said they are investigating.

DISPUTE CLOSELY WATCHED AHEAD OF NOVEMBER ELECTIONS

The dispute was closely watched by election officials and experts across the country as Trump continues to threaten a potential federal government takeover of some local elections and sows doubts about voting ahead of the November elections.

Trump has continued to falsely claim that his defeat in the 2020 election to Democrat Joe Biden was the result of widespread fraud and has deployed US law enforcement and intelligence agencies to re-investigate claims about the collection and tallying of votes.

Justice Department lawyers argued that Fulton County had not met the stringent legal standard necessary to secure the return of material seized during a court-approved search.

During the search, which was approved by a federal magistrate judge, FBI agents seized original 2020 ballots and other records from the county’s election center in Union City, Georgia.

Authorities cited alleged “deficiencies or ​defects” with the 2020 vote, including ​claims that some digital images of ⁠ballots were missing and some absentee ballots did not appear to have been folded as required.

The investigation began with a referral from Kurt Olsen, a lawyer who aided Trump’s attempts to overturn the 2020 election and has since been tasked ​by the White House with re-examining the vote.

Tulsi Gabbard, Trump’s director of national intelligence, attended the search in an unusual move for an official whose focus is on foreign threats to the United States.

Fulton County, a Democratic stronghold in a state that has become hotly ​contested in presidential elections, became the center of conspiracy theories and fraud claims spread by Trump and his allies following the 2020 election.

Biden’s wide margin in Fulton County was key to flipping ​Georgia in Democrats’ favor.

The state swung back to Trump in 2024.

Lawyers for Fulton County argued that the FBI affidavit used to justify the search omitted crucial context showing that many of its claims had previously been investigated and found to be either unfounded or mistakes that were not the result of intentional misconduct.

During a March court hearing in Atlanta, an election expert who advised the county on the 2020 election testified that much of the evidence cited in the affidavit appears to show a misunderstanding of how elections are conducted.