How are Memecoins Taxed? (Beginner’s Guide 2025)

Do I have to pay taxes on memecoins?

Yes. Memecoins are taxed similarly to other cryptocurrencies. Memecoins are subject to capital gains tax and ordinary income tax. 

Let’s break down a few common memecoin tax scenarios. 

Selling memecoins for a profit

Let’s say you buy $500 of DOGE. Months later, you sell it for $2,000. 

In this case, you’d recognize a $1,500 capital gain ($2,000-500). Your tax liability would depend on how long you held your cryptocurrency. 

• Short-term capital gains (held for less than a year) are taxed like ordinary income (10-37%)
• Long-term capital gains (held for more than a year) are taxed at reduced rates (0-20%). 

Swapping one memecoin for another

Let’s say you trade $1,000 worth of Pepe for $1,000 worth of Bonk.

Even if you never cash out to fiat currency, trading away a cryptocurrency is considered a taxable disposal. 

You’ll incur a capital gain or loss depending on how the price of your Pepe has changed since you originally received it. 

Receiving memecoins as income 

If you receive memecoins as income (for example, through staking, mining, or referrals), it’s taxed as ordinary income based on its fair market value when you receive it.

Is President Trump abolishing taxes on crypto?

Eric Trump — son of President Trump — floated the idea of eliminating taxes on U.S.-based cryptocurrencies. 

As of 2025, this proposal has not been introduced in Congress, and it’s difficult to tell whether it will be passed into law. 

For the time being, all cryptocurrencies — including memecoins — remain fully taxable under U.S. law. That means for the foreseeable future, you should track and report all of your memecoin transactions. 

Do I have to report taxes if I lose money on memecoins?

If you lost money on memecoins, you’re still required to report your transactions to the IRS. 

Every disposal of cryptocurrency is required to be reported on your taxes — whether it’s a gain or a loss. 

The good news is that cryptocurrency losses can benefit you during tax time. 

Cryptocurrency losses can offset capital gains during the same year. If your losses exceed your gains, you can deduct up to $3,000 of losses against your ordinary income (like wages or salary). Additional losses can be carried forward into future tax years. 

Do I have to report my memecoin activity if it’s less than $600?

You’re legally required to report all taxable crypto income to the IRS, no matter what the total amount is. 

Whether it’s $10 or $10,000, your profits from memecoin disposals must be included on your return.

Can the IRS track memecoin transactions?

The IRS can track memecoin transactions on the blockchain. In the past, the IRS has worked with blockchain analytics firms like Chainalysis to identify ‘anonymous’ wallets and crack down on tax fraud. 

Starting in 2026, the IRS will have even more resources at its disposal to crack down on crypto tax fraud. Soon, centralized and decentralized exchanges will be required to collect customer information and report it directly to the IRS via Form 1099-DA. 

Best practices for trading memecoins

Here are a few tips for reporting your taxes on memecoins:

Save a portion of your profits: Remember, the memecoin market is highly volatile and prices can crash overnight. That’s why it’s recommended to always keep a portion of your profits aside for tax purposes. This way, you’ll be able to pay off your tax bill even in the case of a severe market downturn. 

Keep detailed records: To be able to track your memecoin taxes, you’ll need the following information. 

• The type of cryptocurrency involved in the transaction 
• The amount of cryptocurrency involved in the transaction 
• The date you acquired/disposed of your cryptocurrency 
• The price of your cryptocurrency at acquisition and disposal 
• Any relevant fees
  

That’s why it’s important to keep a record of all the transactions you’ve made during the year, as well as all the wallets and exchanges you’ve used. 

Use crypto tax software: Looking for an easy way to generate a crypto tax report? Platforms like CoinLedger automatically sync with your wallets and exchanges to generate accurate tax reports — helping you submit your tax return with confidence and avoid future headaches.

Report your memecoin taxes today 

Looking for an easy way to report your memecoin taxes? Try CoinLedger — the platform trusted by more than 700,000 investors across the globe. 

Get started with a free account today.