Paying Taxes on XRP? Here’s How a Crypto IRA Can Help You Keep More of Your Gains

If you’ve been riding the XRP wave, you’ve likely seen some exciting price action during 2025. But with gains come tax responsibilities, and that’s where many XRP investors get caught off guard. Like all crypto assets, XRP is subject to capital gains taxes when you sell, trade, or use it. But what if you could legally avoid taxes on your XRP profits? 

In this article, we’ll break down how taxes work with XRP, the common taxable events to watch out for, and how investing through a Crypto IRA can offer a smarter, more strategic approach. 

Understanding How XRP Is Taxed 

First things first—yes, the IRS considers XRP and all cryptocurrencies as property for tax purposes. That means any time you dispose of your XRP in a way that results in a gain or loss, it’s a taxable event. This includes: 

• Selling XRP for USD or other fiat: If you bought XRP at $0.30 and sold it at $0.80, you’ve made a $0.50 gain per token. The IRS wants its cut. 

• Trading XRP for another cryptocurrency: Swapping XRP for Bitcoin, Ethereum, or even stablecoins like USDC? That’s a taxable event too, and you’ll need to calculate the fair market value of the assets exchanged at the time of the trade. 

• Using XRP to make purchases: Buying a car, paying a contractor, or purchasing NFTs using XRP? Each of those transactions is considered a taxable event and may result in a capital gain or loss. 

• Receiving XRP as payment or rewards: If you earn XRP through staking, interest, or as payment for services, it’s taxed as ordinary income at the fair market value when received.  

Depending on how long you’ve held your XRP, your gains will be taxed as short-term (up to 37%) or long-term capital gains (up to 20%), not to mention state taxes.  

How a Crypto IRA Changes the Game 

Here’s the good news: you don’t have to pay taxes on your XRP gains—if you invest through a self-directed Crypto IRA. 

A Crypto IRA works like a regular IRA, except instead of stocks and bonds, you hold digital assets like XRP. The benefits? Tax-deferred or tax-free growth1. 

• With a Traditional Crypto IRA, you defer taxes until retirement—you will never have to pay capital gains taxes on gains taken as withdrawals in retirement. 

• With a Roth Crypto IRA, you pay taxes on contributions now, but your withdrawals in retirement are typically tax-free.  

What to Do with Tax Day Just a Week Away 

Tax Day is April 15, and that means XRP holders and crypto investors have just a few days to get their tax situation in order. Here’s what you should do ASAP: 

• Gather and review your crypto transaction history: Use your exchange’s transaction export tool to compile all your XRP trades, purchases, and disposals from the past year. The IRS expects accurate reporting. 

• File IRS Form 8949: Every taxable crypto event needs to be reported on Form 8949. You’ll also need to include the total on your Schedule D for capital gains and losses. 

• Don’t forget income taxes on XRP: If you received XRP through staking, airdrops, or as compensation, that’s ordinary income—report it on your 1040. 

• Consider filing an extension: If you’re running out of time or still sorting through your crypto records, you can file for a tax extension using Form 4868, which gives you until October 15. Just remember: an extension to file is not an extension to pay. 

• Open a Crypto IRA to Avoid Future Tax Headaches: Looking for a long-term tax strategy? Investing in XRP through a Crypto IRA can eliminate capital gains taxes entirely. When you hold XRP inside a Traditional or Roth Crypto IRA, your crypto can grow tax-deferred or even tax-free, depending on the account type.   

And here’s the kicker: Open and fund a BitcoinIRA2 account before April 15 and you could earn up to $1,000 in rewards when you contribute $1,000 or more. Even better?   

You can double your tax-advantaged contributions by funding for both the 2024 and 2025 tax years—before the April 15 deadline.  

Trade XRP and other cryptos without triggering taxable events 

Inside the IRA, you can trade XRP for other cryptocurrencies or rebalance your portfolio without paying capital gains taxes each time. Platforms like BitcoinIRA offer institutional-grade security3, insured cold storage4, and full IRS-compliance, making it simple to manage your crypto retirement strategy. 

Why Now Is the Time to Consider a Crypto IRA for XRP 

With XRP’s legal clarity improving and adoption gaining momentum, many investors are positioning it as a long-term hold. But holding XRP in a regular wallet or exchange account means you’ll eventually face the taxman. 

A Crypto IRA, on the other hand, lets you maximize your upside, keep your portfolio active, and potentially retire with tax-free gains—all while staying compliant. 

Whether you’re already holding XRP or looking to make your first investment, shifting to a Crypto IRA could be one of the smartest tax strategies in your crypto playbook. 

Open a Crypto IRA with BitcoinIRA now and start investing in XRP the smart, tax-advantaged way.