Generally, transactions in which you exchange your bitcoin for something else—whether for money, goods, or services—are taxable events. This is because the IRS considers these transactions to be sales or dispositions of bitcoin.

Transactions generally considered taxable:

• Selling your bitcoin for U.S. dollars
• Paying for goods or services with your bitcoin, such as paying with bitcoin for Strike Bill Pay or Bitrefill
• Sending bitcoin to someone as a form of payment

Transactions that are not generally considered taxable:

• Buying bitcoin with U.S. dollars
• Holding bitcoin
• Receiving a portion of your paycheck as bitcoin, such as with Strike’s Get Paid in Bitcoin (please note your income itself is subject to income tax)
• Sending bitcoin as a gift to another person (subject to IRS exclusion amounts)
• Sending bitcoin to your external bitcoin wallet or transferring bitcoin between your own wallets, however, if you pay a fee for sending, this may be considered a disposition of bitcoin
• Paying for goods and services with your cash, such as paying with cash for Strike Bill Pay or Bitrefill

Please note that Strike is not aware of your purpose for making any particular bitcoin send out of the Strike app. This includes whether the send was made to transfer bitcoin to a different wallet that you own, to buy goods and services, or to send a gift to a friend. Also, be aware that receiving payment for goods and services in bitcoin may be subject to tax in the same way that commercial activity is taxed. It is your responsibility to ensure that you make complete and accurate reports of bitcoin transactions to the IRS.

Tax year 2025

Please note, as part of evolving tax reporting requirements for Tax Year 2025, new guidelines may impact how on-chain transaction fees are treated for tax purposes. While the industry is still working to align on best practices, Strike is actively evaluating these changes to ensure compliance while prioritizing your interests. We’re committed to providing clear guidance as soon as our approach is finalized. In the meantime, we recommend consulting a tax professional to understand how these evolving regulations may apply to your situation. Additionally, Strike offers free on-chain withdrawals, including free auto-withdrawals, which are exempt from potential taxable events related to on-chain fees.

Strike does not provide tax advice. These FAQs are for informational purposes only, and they shouldn’t be considered tax advice or recommendations. Please consult a professional regarding the tax implications of trading or transacting in bitcoin.