Are gains on the sale of crypto assets miscellaneous income rather than capital gains?

2025/09/30 10:00
Junya Izumi
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Are gains on the sale of crypto assets miscellaneous income rather than capital gains?

Crypto assets and income classification

The National Tax Agency has stated that, in principle, profits earned by individuals from the transfer of cryptocurrencies are considered "miscellaneous income." Why is this considered "miscellaneous income" rather than "capital gain," which carries a lighter tax burden?

Income tax is categorized into 10 types based on the nature and source of income: interest income, dividend income, real estate income, business income, salary income, retirement income, timber income, capital gain, temporary income, and miscellaneous income, and establishes appropriate methods for calculating income amounts for each type. Income tax is broadly applicable to income in the form of economic gain, but not all income is taxed in the same way.

Even when earning income related to cryptocurrencies, the applicable income classification varies depending on the case.

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MAGAZINE

Iolite Vol.18

March 2026 issueReleased on 2026/01/30
Interview: Iolite FACE vol.18 Takeshi Chino, Representative Director, Binance Japan PHOTO & INTERVIEW: Mai Shin Special Features: “Future Money — The Current State of Value Transfer” “Upcoming Amendments to Japan’s Crypto Asset Regulations” “The Reality of IEOs” Crypto Journey Beyond a Treasury Company: Becoming an Ethereum Evangelist — The Essence and Determination Behind HODL1’s Digital Asset Treasury (DAT) Strategy Interview with Hiroki Tahara, Representative Director, Kusim Inc. (now HODL1) Series: “Expert Perspectives on Interpreting Volatile Crypto Markets” — Kasou NISHI Series Tech and Future — Toshinao Sasaki …and more