Is inherited crypto taxable?

Inherited crypto is generally not taxable when you receive it, but selling it later can be. In the US, the heir's starting value for tax is usually the coin's market value on the day the owner died, so only growth after that date is taxed. The UK follows a similar idea, with Inheritance Tax charged on the estate itself.

Is inherited bitcoin taxable in the US?

Not on receipt. The IRS treats crypto as property, so the general rules for inherited property apply to bitcoin and other coins. Receiving an inheritance does not produce income on its own. Tax enters the picture when the heir disposes of the coins, and the IRS says proceeds from selling inherited property count when deciding whether a return must be filed.

Federal estate tax is a separate question and falls on the estate, not the heir. The IRS sets the basic exclusion amount at $15,000,000 for people who die in 2026, up from $13,990,000 in 2025, so most estates owe none. What happens to the coins themselves, and how heirs get access, is covered in what happens to your crypto when you die.

What is the cost basis of inherited crypto?

Under IRS rules, inherited property generally takes as its basis the fair market value on the date of death, whether or not an estate tax return is filed. If the executor files Form 706 and elects it, an alternate valuation date can be used instead.

There is one exception. If you or your spouse gave appreciated property to the person within one year before their death, and it comes back to you, your basis is their old basis, not the market value. More on basis in general is in what is crypto cost basis.

How does step-up in basis work for crypto?

Suppose a parent bought coins for $2,000 and they were worth $30,000 at death. The heir's basis becomes $30,000. Selling for $31,000 produces a $1,000 gain, not $29,000. If the value fell, the basis steps down instead.

The Form 8949 instructions say a sale of inherited property is reported as long-term regardless of how long the heir held it, with "INHERITED" entered as the acquisition date. This differs from a lifetime gift, where the giver's basis carries over, as explained in is gifting crypto taxable.

Do you pay crypto inheritance tax in the UK?

The estate may. HMRC says cryptoassets form part of a deceased person's estate, much like bank accounts or shares, and their date of death value belongs on the Inheritance Tax return. GOV.UK sets the threshold at £325,000, with 40% charged only on the part above it, and assets left to a spouse or civil partner are exempt.

When an heir later sells, Capital Gains Tax is worked out from the Inheritance Tax value, or from the market value at the date of death if that value is not known. The wider rules are in how crypto is taxed in the UK.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.