Definition ∞ US tax law comprises the regulations and statutes governing taxation within the United States, including those applicable to digital assets. The Internal Revenue Service (IRS) generally classifies cryptocurrencies as property for tax purposes, subjecting transactions to capital gains or ordinary income rules. Understanding these laws is essential for individuals and businesses dealing with digital assets. It dictates tax obligations for digital asset activities.
Context ∞ The application of US tax law to digital assets remains a complex and evolving area, with ongoing guidance and enforcement efforts from the IRS. Debates often concern specific reporting requirements for various crypto activities, such as staking, mining, and decentralized finance. Future legislative changes are anticipated to provide clearer frameworks for digital asset taxation.
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