Crypto in Joint Accounts: What U.S. Expats Need to Know
If you’re an American living abroad and you share a crypto wallet with your partner or even a friend or business partner, you might’ve found yourself wondering, at least once: Whose name actually goes on the IRS forms? And, do we both need to report this?
It’s not a dumb question. The answer can get surprisingly tangled.
Let’s slow down and break it up a bit.
Crypto = Property, Not Currency
The IRS doesn’t see crypto as money. It sees it as property. And that distinction has ripple effects across everything.
So:
- If you sell, swap, or spend crypto, it’s a capital gain or loss.
- If you earn it from staking, mining, freelance gigs, or getting dropped tokens out of nowhere, that’s income.
- And if you co-own the crypto? You’re on the hook for your share of the tax.
Now, let’s say you and your spouse share a wallet. You both chipped in, you both trade on it. In theory, that’s 50/50 ownership, and you’d each report your half of the activity.
But if only you funded the account, and your spouse never touched it? The IRS could decide it’s entirely yours. It doesn’t really matter if it’s technically “joint” on the exchange. Ownership is about substance over form.
What If Your Spouse Isn’t American?
This is where it gets even trickier. Imagine you’re a U.S. expat living in Edinburgh, and your spouse is British. You open a joint account on Kraken or SwissBorg. Who reports what?
You do. The IRS expects you to report your share of the income and gains, even if your spouse is the one actually doing the trading. Unless you’ve made a deliberate choice to file jointly (which opens a whole new can of worms), your UK spouse has no filing obligation to the IRS. But that doesn’t mean their name on the account shields you.
In fact, if the ownership isn’t clearly documented, the IRS might just treat the entire account as yours by default. Which… is not the outcome you want.
So yeah, that joint wallet? The “joint” part may not count for much unless you can back it up.
So What Do You Actually Have to File?
If crypto’s involved and you’re a U.S. taxpayer abroad, your paperwork might include:
- Form 1040: Your regular tax return (with that little digital asset checkbox now staring at you).
- Schedule D + Form 8949: For capital gains/losses.
- Schedule 1 or C: If you earned crypto, even casually.
- FBAR (FinCEN 114): Required if you hold over $10,000 in foreign accounts, including crypto platforms with fiat.
- Form 8938 (FATCA): If total foreign assets cross certain thresholds (which they often do without you noticing).
It’s a lot. And FBAR/FATCA mistakes aren’t minor; penalties can easily hit five figures.
Let’s Talk Through Some Real-World Scenarios
Scenario
1: Two American spouses, one shared exchange account
You and your spouse each contribute $10,000 to a
Binance UK account. Each of you reports half. But if the account is only in
your name, or only one of you actually uses it, the IRS might treat it as a
solo account. You’ll need to prove otherwise if you’re splitting reporting.
Scenario
2: You + non-U.S. partner, shared wallet
You share a crypto wallet worth $30,000 that earns
staking rewards. You’re American, your partner isn’t. You’re responsible for
reporting your share—and if you were the sole contributor, it may be 100% on
you.
That’s the part people often miss. The IRS doesn’t care about shared household finances. It cares about ownership and contribution. And if it’s not documented, they assume the worst.
Haven’t Reported Yet? There’s Still a Way Forward
Plenty of expats miss this stuff, especially if they didn’t realize crypto triggered U.S. reporting in the first place. If that’s you, the Streamlined Foreign Offshore Procedures might help you get back in the clear, no penalties, as long as your mistake wasn’t intentional.
You’ll need to:
- File the last 3 years of U.S. returns
- File up to 6 years of FBARs
- Submit a statement explaining you didn’t know
It’s paperwork-heavy, but it’s much better than waiting and hoping it won’t catch up to you.
Final Thought
Crypto in joint accounts adds a weird, often-overlooked layer to the already messy world of expat taxes. And honestly, the IRS doesn’t care who you trust enough to share a wallet with, it cares who owns the assets, who earns from them, and whether they’ve shown up on the right forms.
Keep good records. Know what’s yours (and what isn’t). And if things are unclear, don’t just guess, ask someone who knows how these rules actually work in real life, like the tax professionals from Expat US Tax
Because once you’re in the crypto world, especially as an American abroad, the burden of proof is usually on you.
