How To Make $80,000 In Crypto Profits And Pay Zero Tax Cryptocurrencies like bitcoin are treated as “property” per IRS rules (IRS Notice 2014-21). When you trade cryptocurrency for a profit, you end up having to pay taxes on the resulting capital gains. The capital gains (profit) is the difference between how much you paid for the cryptocurrency (the cost basis) and how much you sold it for (proceeds). Under the current tax code, the federal income tax rate you have to pay on these crypto profits could go as  high as 37%. However, with a little tax planning, you can greatly reduce that amount, and even bring it down to $0.