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Author: Admin | 2025-04-27
How do I avoid paying taxes on cryptocurrencyThere are legal strategies you can use to avoid or minimize crypto taxes. Here are the top methods for US taxpayers:1. Crypto tax loss harvestingSell crypto at a loss to offset gains and reduce your tax liability. Complete trades before the tax year ends to lock in the benefit.Learn more in our guide to crypto tax loss harvesting.2. Use HIFO/TokenTax minimization accountingHIFO (Highest In, First Out) prioritizes selling the most expensive assets first, reducing taxable gains for the year.Learn more about crypto accounting methods.3. Donate your crypto and give cryptocurrency giftsDonating crypto to IRS-recognized nonprofits avoids capital gains tax and may be tax-deductible. Gifting crypto to friends or family is also tax-efficient.Learn more: are crypto gifts taxable?4. Invest for long-term capital gainsHolding crypto for over a year qualifies for lower, long-term capital gains tax rates, which range from 0%-20%.5. Simply don't sell your cryptoHolding your assets avoids triggering taxable events. If you need liquidity, consider taking out a crypto loan instead.Simple strategies to reduce your crypto taxes in 2025Here are practical ways to reduce your crypto taxes while staying IRS compliant:Harvest your crypto lossesSelling at a loss can offset capital gains and reduce your overall tax bill. Losses can also carry forward to future years.Learn more in our guide to crypto tax loss harvesting.Hold crypto assets long termHolding crypto for more than 12 months qualifies for reduced long-term capital gains tax rates.Take profit during a low-income yearSelling during a year with low personal income may lower the tax rate you pay on crypto gains.Calculate your crypto gains with our free crypto profit calculator.Give cryptocurrency gifts and donate cryptoGifting avoids capital gains taxes, and donating to IRS-approved nonprofits can result in tax deductions.Learn more about tax deductions for crypto donations.Buy and sell crypto via your IRA or 401(k)Using self-directed IRAs allows you to trade crypto tax-advantaged within retirement accounts.Take out a crypto loanBorrowing against your crypto avoids taxable disposals while providing access to funds.See our expert picks of the best crypto loans.Move to a crypto tax-free countryRelocating to jurisdictions with no crypto taxes can
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