Crypto and Digital Assets – What U.S. Expats Need to Report in 2025
As the IRS sharpens its focus on digital assets, U.S. citizens living abroad must take note: crypto income and holdings are not exempt from reporting. Whether you’re trading Bitcoin, holding NFTs, or staking tokens while living overseas, you have important U.S. tax obligations.
🧾 Yes, Expats Must Report Crypto
All U.S. citizens, including expats, are required to report worldwide income, which includes income or gains from digital assets. The IRS treats most cryptocurrencies as property, meaning capital gains rules apply.
Common crypto transactions that require reporting:
- Selling crypto for fiat currency (e.g., USD, EUR)
- Exchanging one crypto for another
- Using crypto to pay for goods or services
- Receiving crypto from staking, mining, or as payment
Each of these transactions may result in taxable income or capital gains and must be documented on your tax return.
🌍 FBAR & FATCA Considerations
If you store your crypto on a foreign exchange, you may also be required to file FBAR (FinCEN 114) if your total foreign accounts exceed $10,000 at any point in the year.
Likewise, under FATCA, certain foreign-held assets (including crypto accounts) may need to be reported on Form 8938.
🔐 Keep Meticulous Records
Because digital transactions can involve multiple exchanges and wallets, keeping detailed records is essential. Track:
- Dates of acquisition and sale
- Value at time of transaction (in USD)
- Purpose (purchase, trade, etc.)
📌 Stay Ahead of the Curve
IRS scrutiny of crypto activity continues to rise. If you’ve been involved in crypto abroad, now’s the time to get compliant. Failing to report digital income could trigger penalties—even audits.
Need help reporting crypto as an expat? Our specialists at Expatriate Tax Returns can guide you through every detail.
