Crypto Taxes for US Businesses and LLCs

Written by CA Sumit ChandwaniChartered Accountant & Founder · Reviewed by Minal Bihani, EA

If your LLC touches crypto, the accounting is heavier than the trading app makes it look.

Accepting crypto as payment

Revenue is recognized at the fair market value of the coins when received — that's ordinary business income. From that moment, the coins have a cost basis, and any later change in value is a separate capital gain or loss when you sell, swap or spend them. One customer payment, two tax events.

Trading inside the business

• Every disposal — selling, swapping token-for-token, paying a vendor — is a taxable event
• Gains are short- or long-term based on holding period
• Basis tracking per lot is mandatory; exchanges rarely do this correctly across wallets

Mining, staking and rewards

Rewards are ordinary income at fair value when you gain control of them, and self-employment tax can apply when it's an active trade. The received coins then carry that value as basis for the eventual sale.

The digital asset question

Business and personal returns now ask directly whether you dealt in digital assets. Answering it falsely is its own problem; answering it truthfully without records is an audit invitation. Wallet-level records are the fix.

Entity wrinkles

An LLC holding crypto follows its tax classification — disregarded, partnership or S/C-corp — and foreign-owned single-member LLCs must remember that crypto transfers between owner and LLC are reportable on Form 5472 like any other transaction.

The bottom line

Property rules + per-lot basis + broker reporting = crypto bookkeeping is real accounting now. MOREOFTAX reconciles wallet and exchange activity into clean books and files the returns that match what the IRS already sees.