How is bitcoin taxed in the US?

The IRS treats bitcoin as property. Buying and holding isn't taxed, but selling, trading, or spending it can mean capital gains tax. This isn't tax advice; check with a tax pro.

Bitcoin held more than a year gets lower long-term capital gains rates. Spending bitcoin on a purchase counts as selling it. Exchanges now report sales to the IRS on Form 1099-DA. Congress has debated a small-purchase exemption, but none has passed.