Topic · US expat tax
Crypto Taxes for US Expats
Why the IRS treats crypto as property, how it's reportable wherever you live, the evolving FBAR/Form 8938 picture, and why the FEIE doesn't shelter crypto gains.
For U.S. tax purposes, cryptocurrency is generally treated as property, not currency. That means disposing of it — selling, swapping one coin for another, or spending it — can be a capital gain or loss event, calculated in USD. Because U.S. tax follows citizenship, this applies regardless of where you live.
Crypto is property, so gains are capital gains
Each disposal is generally measured by the USD value at disposal minus your USD cost basis, with the holding period affecting whether the gain is short- or long-term. Common taxable events include selling for fiat, trading one token for another, and using crypto to pay for goods or services. Simply buying and holding generally isn't a taxable event on its own.
Which crypto activity tends to be taxable
| Activity | Generally taxable? | Note |
|---|---|---|
| Buying crypto with USD and holding | No (not on its own) | Basis is set; tax event comes at disposal |
| Selling crypto for fiat | Yes — capital gain/loss | Measured in USD at disposal |
| Swapping one token for another | Often yes | Treated as disposing of the first asset |
| Spending crypto on goods/services | Often yes | A disposal at fair market value |
| Staking / certain rewards | Often as income (then basis resets) | Evolving area; facts and guidance vary |
Reporting accounts: FBAR and Form 8938 (evolving)
Beyond income, there can be an account-reporting layer. Whether crypto held on a non-U.S. exchange counts toward the FBAR has been an evolving area, and proposed rules have signalled change over time. Form 8938 (FATCA) treatment of crypto can also depend on how and where it's held. Because this is genuinely in flux, it's worth confirming the current-year position rather than relying on older guidance.
- Crypto income/gains are reportable on your return regardless of residence.
- Crypto held on a foreign exchange may raise FBAR/Form 8938 questions — an evolving area.
- The FEIE does not cover crypto capital gains.
Hold or trade crypto while living abroad?
The free Tax Risk Check helps you think through gains reporting and the evolving FBAR/Form 8938 picture. Atamatax provides preparation support; this is not individualized tax or legal advice.
Atamatax provides tax preparation support and educational resources. This website does not constitute legal or tax advice.