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The Easiest Way To Cash Out Crypto TAX FREEWhen crypto is sold for profit, capital gains should be taxed as they would be on other assets. And purchases made with crypto should be subject. Selling cryptocurrency triggers a taxable event. Your tax liability is determined by several factors: Profit. Your capital gain, or how much profit you earn. Confused about crypto taxation? Our guide simplifies IRS rules on Bitcoin and other cryptocurrencies, covering tax rates, capital gains, and income tax.