Crypto Exit Tax Calculator
Calculate Your Potential Exit Tax
The IRS treats crypto as property when you renounce U.S. citizenship. This tool estimates your potential tax liability based on your holdings.
The $890,000 exclusion applies to total capital gains across all assets. You may owe tax on gains exceeding this amount at a 23.8% rate.
Crypto losses can offset gains from other assets. If your net gains are below $890,000, no exit tax applies.
Renouncing your U.S. citizenship or long-term residency sounds like a fresh start - until you face the exit tax on crypto assets. If you’ve held Bitcoin, Ethereum, or other digital currencies for years, the IRS doesn’t see your wealth as something you can walk away from. They treat it like a house, stocks, or gold: property that’s been growing in value, and they want their cut - even if you never sold a single coin.
Who Actually Pays the Exit Tax?
Not everyone who gives up U.S. citizenship owes this tax. Only those labeled as “covered expatriates” do. And to be one, you must meet at least one of three tests in 2025:- Your net worth is $2 million or more on the day you renounce.
- Your average annual U.S. income tax over the last five years was over $206,000.
- You didn’t file all required U.S. tax returns for the past five years.
If you’re sitting on $50,000 in crypto and make $60,000 a year? You’re probably fine. But if you bought Bitcoin at $50 in 2015 and it’s now worth $800,000? You’re in the crosshairs.
How the IRS Treats Your Crypto
The IRS doesn’t see cryptocurrency as money. It’s property. That means every time you trade, sell, or even gift crypto, you trigger a taxable event. And when you renounce your citizenship? The IRS pretends you sold everything you owned - including every coin in every wallet - the day before you left.This is called a “deemed sale.” You don’t actually move your coins. You don’t cash out. But the IRS calculates your capital gains as if you did. They take the fair market value of your crypto on the day before expatriation and subtract your cost basis (what you paid for it, plus fees). The difference? That’s your taxable gain.
Here’s the catch: if you mined Bitcoin in 2011 with a $200 electricity bill and now hold 50 BTC worth $5 million, your cost basis is still $200. The IRS doesn’t care that you didn’t have the money to pay taxes back then. They only care about the gain now.
The $890,000 Exclusion - And Why It’s Not Enough
There’s a silver lining: the first $890,000 of net capital gains across all your assets is tax-free in 2025. That includes crypto, real estate, stocks, even your art collection.But here’s where crypto gets tricky. Let’s say you have:
- $1.2 million in Bitcoin
- $300,000 in Ethereum
- $100,000 in stocks
Your total gain? $1.5 million. Your exclusion? $890,000. You owe tax on $610,000. That’s not a small number. And if you’re in the top tax bracket, that’s 23.8% - over $145,000 in taxes on paper gains you never touched.
Unlike traditional assets, crypto doesn’t come with clean records. Blockchain.com found that 61.3% of Bitcoin transactions in 2023 had unknown cost basis. If you bought your first ETH on a now-defunct exchange in 2017 and lost the receipt? The IRS doesn’t accept “I think I paid $150.” They want transaction IDs, timestamps, and exchange statements.
What Happens If You Don’t Report?
Failing to file Form 8854 - the Initial and Annual Expatriation Statement - doesn’t just mean you owe more tax. It means you’re still considered a “covered expatriate” forever. That triggers:- 23.8% tax on future U.S.-source income (like rental property or dividends from U.S. stocks).
- 30% withholding on gifts you give to U.S. citizens.
- Difficulty getting a U.S. visa in the future.
And the IRS is watching. Since 2020, Form 1040 has asked: “Did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?” In 2025, they’ve added 12 new examiners just to audit crypto expatriation cases. The number of crypto-related exit tax cases has jumped 227% since 2021.
FBAR and FATCA: The Hidden Reporting Traps
Even if you think you’re done with the IRS, your crypto might still be tied to U.S. reporting rules.If your crypto is held on foreign exchanges - like Binance, Kraken, or Coinbase Europe - and the total value of all your foreign financial accounts (including crypto wallets) hit $10,000 at any point in the year, you had to file FinCEN Form 114 (FBAR). Miss that? Penalties start at $10,000 per year.
And if you’re a U.S. resident at any time during the year, and your foreign crypto holdings exceed $50,000 on the last day of the year (or $75,000 at any time), you also need to file Form 8938 under FATCA. This isn’t optional. It’s not a suggestion. It’s a legal requirement.
And here’s the kicker: if you didn’t file these forms in the years leading up to expatriation, you automatically become a covered expatriate - even if your net worth was under $2 million.
Real Stories: The $1.2 Million Mistake
Reddit user u/CryptoExpat2025 shared their story: mined 50 BTC in 2011 for $200 in electricity. When they renounced in March 2025, BTC was at $100,000. Their gain? $4.9998 million. After the $890,000 exclusion? They owed tax on $4.1 million. They paid over $970,000 in exit tax - and still had 45 BTC left.Another user on Expat Forum said they paid $1.2 million in exit tax on Bitcoin alone. Their regret? Not gifting BTC to family members before renouncing. Gifts to non-U.S. persons aren’t taxed under U.S. law. But gifts to U.S. persons? Those can trigger gift tax - and the IRS watches those too.
On the flip side, u/SmartExpat on Reddit paid $0. How? They timed their renunciation after a 30% crypto market dip. They used $300,000 in crypto losses from 2024 to offset gains. They documented every transaction with CoinTracker. And they filed Form 8854 with supporting records. Zero tax. Zero stress.
How to Avoid a Nightmare
If you’re thinking about renouncing, here’s what actually works:- Start 12+ months early. Don’t wait until your flight is booked. This isn’t a paperwork task - it’s a financial strategy.
- Track every transaction. Use tools like Koinly, CoinTracker, or TokenTax. Export all wallet addresses, exchange records, and timestamps. If you used a hardware wallet, make sure you have the private keys.
- Use losses to offset gains. If you sold crypto at a loss in 2024, you can use that to reduce your exit tax bill. Don’t just sit on losses - harvest them.
- Consider gifting. Gift crypto to non-U.S. persons before renouncing. No U.S. gift tax applies. Just make sure it’s documented and done before the deemed sale date.
- Work with a specialist. 89.7% of users who hired a crypto-savvy international tax pro reported satisfaction. General CPAs? They often miss crypto nuances. Look for someone certified in both crypto taxation and expatriation law.
What’s Coming Next?
The IRS isn’t done. In May 2025, they issued Notice 2025-41, requiring DeFi and NFT valuations to be based on the “most liquid market available” - meaning you can’t pick the lowest price on a small exchange. You have to use Coinbase, Kraken, or Binance US.There’s also H.R. 3892, the Expatriation Tax Modernization Act of 2025. It proposes raising the exclusion to $1.2 million and creating a special cost basis rule for crypto bought before 2014. But it’s still in committee. Don’t count on it.
By 2027, the IRS may require crypto exchanges to report expatriating users’ holdings directly - just like they do with 1099-B forms for stocks. That means the IRS will know your holdings even if you don’t tell them.
The World Bank estimates 420 million people globally hold crypto. The U.S. exit tax was designed for real estate and stocks. It wasn’t built for digital assets that can double in a week. And as more people renounce, the system will crack.
Bottom Line
The exit tax on crypto isn’t a myth. It’s real, it’s aggressive, and it’s getting tighter. If you’re a U.S. citizen with significant crypto holdings and you’re considering renouncing, you’re not just changing your passport - you’re triggering a tax event that could cost you hundreds of thousands of dollars.But it’s not hopeless. With the right planning, documentation, and timing, you can minimize - or even eliminate - your tax bill. The key isn’t hiding assets. It’s understanding how the IRS sees them - and moving before they change the rules again.
Does the exit tax apply to all crypto, including NFTs and stablecoins?
Yes. The IRS treats all digital assets as property, including NFTs, stablecoins, DeFi tokens, and even crypto rewards from staking. Any asset you own on the day before expatriation is subject to the deemed sale. Stablecoins like USDC are taxed based on their U.S. dollar value, even though they’re pegged to the dollar. If you bought USDC for $1 and it’s still worth $1, there’s no gain. But if you bought it at $0.98 and sold it at $1.02, that 2-cent gain is taxable.
Can I avoid the exit tax by moving my crypto to a non-U.S. exchange before renouncing?
No. Where your crypto is stored doesn’t matter. The IRS taxes you based on what you own, not where it’s held. Moving your Bitcoin from Coinbase to Binance Global doesn’t change your tax liability. The deemed sale applies to your entire portfolio, regardless of exchange or wallet location. However, holding crypto on foreign exchanges triggers additional reporting (FBAR/FATCA), which can push you into covered expatriate status if you didn’t file those forms.
What if I don’t know my crypto cost basis?
The IRS requires you to use a “reasonable method” to determine cost basis. If you can’t prove what you paid, they may assume your basis is $0 - meaning your entire portfolio value is taxable. You can use blockchain analysis tools like Chainalysis Reactor or CoinTracker’s historical pricing database. Some tax pros use average cost or first-in-first-out (FIFO) methods. But you must document your method. The IRS won’t accept “I don’t remember.”
Can I renounce without paying the exit tax if I have crypto losses?
Yes - if your total net capital gains across all assets (crypto, stocks, real estate) are under $890,000. Crypto losses can offset gains from other assets. For example, if you have $1.1 million in crypto gains but $300,000 in stock losses, your net gain is $800,000 - below the exclusion. No exit tax owed. Timing matters: sell losing positions before the deemed sale date to maximize offset.
Do I still have to file U.S. taxes after renouncing?
Yes - for the year you renounce, you must file a final U.S. tax return and Form 8854. If you’re a covered expatriate, you may also have to file Form 8854 annually for 10 years to report U.S.-source income, even if you live abroad. You’re also still required to file FBAR and FATCA if you have foreign financial accounts - including crypto - over the reporting thresholds. Renouncing doesn’t erase your past obligations.
8 Comments
If you're holding crypto and thinking about renouncing, stop scrolling and start organizing your records right now. I've helped three clients this year avoid six-figure exit taxes just by using CoinTracker and timing their renunciation after a market dip. Don't wait until your flight is booked - you need at least a year to document every transaction, harvest losses, and gift to non-U.S. persons. The IRS doesn't care if you lost receipts from 2017. They'll assume your basis is $0. That's not a risk you want to take.
So let me get this straight - you're telling me I spent five years mining BTC on a laptop with a $200 electricity bill and now the IRS wants $4M in taxes on paper gains I never touched? That's not tax law, that's extortion. They treat digital assets like they're physical property but don't give you the option to physically move them. If I can't sell without triggering tax, then the deemed sale is just a backdoor wealth grab. This system is broken and it's punishing people who actually built wealth from scratch.
they dont want your money they want your soul. the irs is part of the new world order. they use crypto exit tax to track you even after you leave. they know where you are. they know what you own. they know when you sleep. the 890k exclusion? its a trap. theyll make you pay it back through fbars and fatca forever. and if you dont file? theyll come for your family. they already did it to that guy in texas. his daughter got denied a student visa because he forgot one transaction. its not about taxes. its about control.
so you paid 970k in exit tax on bitcoin you mined in 2011... and you still have 45 btc left? congrats. you just paid the government to hold your bag for you. if i had that kind of money i'd just buy a small island and tell the irs to go f themselves. instead i'm here reading this like it's a soap opera. someone please tell me why i care about your crypto drama.
we built a system where the government sees your wealth as something to be claimed the moment you try to leave. but what if wealth isn't meant to be owned? what if it's meant to be shared? the exit tax isn't about fairness. it's about fear. fear of losing control. fear of people choosing freedom over bureaucracy. and yet here we are - people with more than enough, still chained to a machine that says 'you can't walk away.' maybe the real asset isn't the bitcoin. it's the courage to say no.
you can do this. i know it feels overwhelming but you are not alone. i renounced last year after losing 300k in crypto and using it to offset my gains. i used tokentax. i documented everything. i cried a lot. but i did it. zero exit tax. zero stress. you don't need to be perfect. you just need to start. today. right now. open cointracker. export your history. call a specialist. you got this. the future is yours. not the irs.
bro i just found out about this and my heart dropped. i bought my first eth in 2018 for like 300 bucks and now its worth 15k. i never thought this would matter. i thought if i move to canada i just leave it all behind. turns out the irs is still watching. i think i need to talk to someone. anyone know a good crypto tax lawyer who doesnt charge 500 an hour?
While I appreciate the thoroughness of this exposition, I must respectfully submit that the regulatory architecture underpinning the exit tax on digital assets represents a profound dissonance between 20th-century fiscal doctrine and 21st-century economic reality. Cryptocurrencies, by their very nature, defy traditional categorization as property - they are neither currency nor tangible asset, but rather a novel form of decentralized value expression. To impose capital gains taxation on an unrealised, non-transferred, and globally distributed asset class is, in my view, not merely impractical, but philosophically incoherent. The IRS, in its current form, is attempting to tax the wind.