How are crypto gains taxed for US expats?

US expats are subject to the same IRS crypto tax rules as US residents — the IRS treats cryptocurrency as property, not currency, which means every taxable event generates capital gains or losses that must be reported on your US tax return.

**Taxable Events Include**: Selling crypto for fiat currency, trading one crypto for another, using crypto to pay for goods/services, receiving crypto as income (mining, staking, airdrops, DeFi rewards), and receiving employer compensation in crypto.

**Short-Term vs Long-Term Rates**: Crypto held for 12 months or less is taxed as ordinary income (up to 37%). Crypto held longer than 12 months qualifies for long-term capital gains rates (0%, 15%, or 20% depending on your income level).

**FEIE Does NOT Apply to Crypto Gains**: The Foreign Earned Income Exclusion only covers earned income from services performed abroad. Crypto trading profits, staking rewards, and investment gains are generally passive income and cannot be excluded under FEIE.

**Foreign Tax Credit May Help**: If your country of residence also taxes crypto gains, you may be able to use the Foreign Tax Credit (Form 1116) to offset your US tax liability, preventing double taxation.

**FBAR and FATCA**: Crypto held on foreign exchanges may need to be reported on FBAR (FinCEN 114) and Form 8938 (FATCA) if the aggregate value exceeds reporting thresholds, though this area is still evolving.

**Record Keeping**: Maintain records of every transaction in USD at the time of the transaction — this is essential for accurate cost basis calculations.