Trading crypto on Crypto.com comes with taxes attached, but it doesn’t have to be hard to become compliant. Crypto.com has become one of the leading crypto brokers worldwide, offering a wide range of products from crypto trading to crypto cards and earning vehicles.
Citizens from most countries, including the US, can use Crypto.com products, but taxable events are different in different countries. Today, we focus on taxable events for US customers who use Crypto.com.
Do you have to pay taxes when trading crypto on Crypto.com?
In the US, if you buy and sell cryptocurrencies on Crypto.com, you’ll have a taxable event, subject to capital gains taxes. With the Crypto.com app, you can buy and sell 250+ cryptocurrencies.
Simply buying crypto with FIAT and holding it in your wallet is not a taxable event, but if you sell it for FIAT or any other cryptocurrency, you’ll have a taxable event, subject to capital gains taxes.
You can easily import all of your crypto trades from Crypto.com into CoinTracking by CSV or API to take care of your crypto tax calculation.
Do you have to pay taxes when trading NFTs on Crypto.com?
Trading NFTs, like any other cryptocurrency, is a taxable event in the US, subject to capital gains taxes. Crypto.com has an NFT marketplace, where you can create, buy, and sell NFTs, leading to different taxable events.
Is creating and selling NFTs on Crypto.com taxable?
Yes, creating and then selling NFTs is a taxable event in the US, subject to ordinary income taxes. You’re taxed as an NFT creator and not as an investor, with no place for capital gains taxes in this case. The sales proceeds of your NFT sales are the amount you need to report as ordinary income in your taxes.
Is buying and selling NFTs on Crypto.com taxable?
Yes, if you buy and sell NFTs for other NFTs or any cryptocurrency, you’ll have a taxable event, subject to capital gains taxes. Let’s look at an example:
In January 2021, you bought 1 ETH at $2,000. In March 2021, you bought an NFT worth 0.1 ETH when the price of 1 ETH was $2,500. When you trade 0.1 ETH for NFT, you’re treated as selling 0.1 ETH for fiat, then immediately use the fiat to buy NFT. Your capital gain when buying the NFT is $50 (0.1 ETH* $2,500 – 0.1 ETH * $2,000).
Learn more about NFT taxes in this guide.
Learn how to import all of your crypto trades from Crypto.com into CoinTracking by API:
Is earning crypto interest on Crypto.com taxable?
Yes, earning crypto interest or rewards is a taxable event in the US, subject to ordinary income tax rate. On Crypto.com, you can put your crypto to work, with interest rates ranging from 3% to 14%, depending on your holding period, the amount invested, and the cryptocurrency you choose.
If you earn crypto interest, you need to determine its Fair Market Value (in USD) each time you receive it and declare it as ordinary income.
Learn more about the tax implications of earning crypto interest.
Is spending crypto with the Crypto.com card taxable?
Yes, spending crypto with a debit/credit card or directly is a taxable event in the US, subject to capital gains taxes.
Crypto.com offers crypto cards where you can spend your crypto holdings at several merchants. Each time you purchase with your crypto card, you’ll have a taxable event. Let’s look at an example following the first scenario above, where you purchased 1 ETH in January 2021.
In May 2021, you decided to buy a pair of jeans for $100. In May 2021, 1 ETH is worth $3,000, while you initially bought it at $2,000. The pair of jeans is priced at 0.033 ETH. To buy the pair of jeans, you sell that amount of ETH, resulting in $100 of sales proceeds. The capital gain for this purchase is $33.33 (0.033 ETH* $3,000 – 0.033 ETH*$2,000) because between January 2021 and May 2021, Ethereum gained in price.
Learn more about the taxes involved when you spend crypto.
Is receiving a debit/credit card rebate in crypto a taxable event?
If you receive a rebate in crypto due to the use of your crypto debit/credit card for purchases, the rebate is not considered taxable income. On CoinTracking, you can classify the rebate as non-taxable income, which will not be included in your income report but will give you a cost basis based on the FMV of the rebate at the time of your receipt.
Is receiving a loan from Crypto.com taxable?
No, receiving a loan in cash or crypto is not a taxable event in the US. If you receive a loan from Crypto.com credit, you won’t have to pay taxes on it.
How to report Crypto.com taxes?
If you’re in the US, these are the taxable events you will be facing when using Crypto.com:
- Trading crypto for other crypto or FIAT on the Crypto.com app: Capital gains taxes
- Trading NFTs on the Crypto.com NFT marketplace: Capital gains taxes
- Creating and selling NFT on the Crypto.com NFT marketplace: Ordinary income taxes
- Earning crypto interest from Crypto.com: Ordinary income taxes
- Spending crypto with a Crypto.com metal card: Capital gains taxes
The best Crypto.com tax software: CoinTracking
The best crypto tax software for Crypto.com trades in the market is CoinTracking.
You can import your trades using CSV or API, track your gains/losses, and generate tax reports according to your preferred accounting method.
Beyond Crypto.com, CoinTracking is your full crypto tax solution for:
Moreover, CoinTracking can easily classify all your earnings from yield farming, liquidity pools, crypto staking, and much more.
Crypto.com taxes with no errors: CoinTracking Full Service in the US.
CoinTracking also offers a Full Service for US traders. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.
This post is part of the Crypto Taxes AMA series. Follow our weekly AMAs on Twitter where our expert CPA, Sharon Yip answers your crypto tax questions. You can download 30+ AMA crypto tax reports for free.
Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.