Cryptocurrency you receive for goods, services, or wages. It is ordinary income at fair market value on the day you receive it, and that value becomes your cost basis for a later sale.
Freelancers and businesses paid in crypto have two events, not one: income when the coins arrive and a gain or loss when they are later sold or spent. Skipping the first step understates income; skipping the second loses the basis.
Yes, the same as if you were paid in dollars. Payment in crypto does not change the character of the income.
Source: IRS Notice 2014-21, Q&A 8 and 11
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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