Crypto Inheritance Taxes Explained: Step-Up Basis, 40% Estate Tax & $15M Exemption (2025 Update)

What happens to your crypto when you die? The IRS has strict rules on inheritance, estate taxes, and the powerful step-up basis that can save heirs from massive capital gains.

Clinton Donnelly, founder of CryptoTaxAudit and known as the “Crypto Tax Fixer,” breaks down how the $15 million lifetime exemption, the 40% estate tax rate, and the step-up basis apply to crypto holders in 2025.

What you’ll learn in this video:
• How the new $15M estate tax exemption (Genius Act 2025) works
• Why estates over the limit face a 40% federal tax hit
• How step-up basis resets crypto cost basis for heirs — often tax-free
• Planning strategies like joint ownership and spousal transfers to reduce taxes
• Why poor tax planning leaves average investors vulnerable while the wealthy avoid probate

Common questions traders and investors ask CryptoTaxAudit:
• Do heirs pay capital gains when they inherit crypto?
No. Inherited crypto receives a step-up in basis, so heirs don’t pay tax on gains until they sell.

• What is the difference between estate tax and inheritance tax?
Estate tax is paid by the estate before assets are distributed; inheritance tax (in some states) is paid by the person receiving assets.

• Does step-up basis apply to Bitcoin and other digital assets?
Yes. Crypto is treated like property, so heirs get the fair market value as their new cost basis.

• How do joint accounts or spousal ownership protect against probate?
Assets held jointly often pass directly to the surviving spouse, bypassing probate and avoiding extra estate tax complications.

Whether you’re holding Bitcoin, Ethereum, or altcoins, knowing these inheritance rules could save your family millions.

📞 Book your crypto tax consultation today:
👉 https://www.cryptotaxaudit.com/crypto-tax-consultation

🔗 Official IRS estate & gift tax page: https://www.irs.gov/businesses/small-businesses-self-employed/estate-and-gift-taxes

Timestamps:
00:00 What happens when a crypto owner dies
00:22 The $15M estate tax exemption (Genius Act 2025)
00:55 How the 40% estate tax works
01:20 Joint ownership & probate avoidance strategies
02:10 Political fights over the exemption limits
02:50 Step-up basis explained (crypto inheritance)
03:35 Why step-up basis is a massive tax break
04:00 Farmers, family businesses, and crypto holders at risk
04:30 Final thoughts & call to action

#CryptoTax #EstateTax #StepUpBasis #CryptoInheritance #IRS #CryptoTaxAudit #clintondonnelly

🎙️ About Clinton Donnelly
Clinton Donnelly, LLM, EA, is the founder of CryptoTaxAudit.com, the leading crypto tax and audit defense firm for U.S. taxpayers. Known as the “Crypto Tax Fixer,” he’s helped thousands of investors legally report their crypto holdings and defend against IRS scrutiny.

🏆 Award-Winning Expertise
In 2025, CryptoTaxAudit was named Cryptocurrency Taxation Services of the Year by Financial Services Review, recognizing Clinton’s unmatched reputation and legal precision in the crypto tax space. - https://www.financialservicesreview.com/cryptotaxaudit

CryptoTaxAudit specializes in:
✅ Complex gain calculations and wallet tracking
✅ Expat and foreign disclosure compliance
✅ IRS audits, defense, and forensic tax strategies
✅ Bulletproof crypto tax returns designed to resist audits

📬 Work with the CryptoTaxAudit team:
👉 https://www.cryptotaxaudit.com/tax-prep-waiting-list

▬▬▬▬▬ NOTICE ▬▬▬▬▬

⚠️ 𝗕𝗘𝗪𝗔𝗥𝗘 𝗢𝗙 𝗦𝗖𝗔𝗠𝗠𝗘𝗥𝗦 𝗜𝗡 𝗢𝗨𝗥 𝗖𝗢𝗠𝗠𝗘𝗡𝗧𝗦 𝗔𝗡𝗗 𝗖𝗢𝗠𝗠𝗨𝗡𝗜𝗧𝗬 𝗖𝗛𝗔𝗡𝗡𝗘𝗟𝗦
We will never ask you for your personal information on social media. Beware of people masquerading as our host, guests, or sponsor company.

📜 Disclaimer
The content in this video is for educational and entertainment purposes only. While we aim to provide accurate and up-to-date information about cryptocurrency taxation, this is not intended as legal, tax, or financial advice. Always consult with a qualified tax professional to ensure compliance with IRS regulations and accurate reporting of your cryptocurrency transactions.

Related Search Terms: crypto inheritance tax, crypto estate tax, step up basis crypto, crypto death taxes, bitcoin inheritance tax, crypto taxable events, crypto estate planning, crypto cost basis IRS, crypto probate rules, crypto tax audit