jakiro
author:Bill Lin
1. Surprise after 9 years
On September 18, 2025, Coinbase officially announced that NBA star Kevin Durant has recovered Coinbase’s account and password.Subsequently, Durant sold more than 3,000 bitcoins in a short period of time and cashed out about US$350 million.According to Durant, he first came into contact with Bitcoin in 2014 or 2015.At that time, he bought a small amount of Bitcoin on Coinbase in order to watch YouTube videos.After that, Durant joined the Golden State Warriors and once again became interested in Bitcoin at a banquet, and then bought a large amount of Bitcoin.However, Durant later forgot the password of his Coinbase account and was not successfully retrieved until recently.
During the nine years that Durant has forgotten, the price of Bitcoin has soared rapidly.Data shows that the price of Bitcoin was $400-1,000 in 2016.When Durant sold it, it had stabilized above $110,000, soaring about 275 times from its lowest point of that year.
2. In addition to surprise: How to pay tax on these Bitcoins?
Durant’s thousands of Bitcoins were lost and regained. Faced with such a “windowed fortune from heaven”, the question also came: In the United States, which is known for its strict tax regulation, will this income be paid?How much tax should you pay if you need it?In fact, as early as 2014, when the entire cryptocurrency market had a market value of only billions of dollars, the IRS had defined Bitcoin as property rather than currency, and introduced Notice 2014-21 and a series of regulations to tax crypto assets such as Bitcoin.As for the specific taxes that Durant needs to pay, the federal and state levels are mainly considered here.
2.1 Federal Capital Gains Tax and Net Investment Income Tax
The United States imposes federal capital gains tax on capital gains, and capital gains are divided into long-term and short-term capital gains based on whether they have been held for one year.Durant holds Bitcoin for more than one year and is a long-term capital gain, while the tax rate of the US long-term capital gains tax is 0%, 15% or 20%.Referring to the latest IRS regulations, considering that Durant is still unmarried, the long-term capital gains tax collection standards for single filers in 2025 can be applied to his income:
(1) The tax rate of taxable income between $0-48,350 is 0%;
(2) The tax rate for taxable income between $48,351 and 533,400 is 15%;
(3) The tax rate for taxable income exceeding $533,400 is 20%.
Among them, the calculation method of taxable income is to minus the adjusted total income minus the standard deduction or itemized deduction (whichever is larger).The standard deduction for single applicants in 2025 has increased to $15,000.
According to media reports, the cost price of BTC purchased by Durant in 2016 was about $650.Combining this cost price and the latest IRS regulations, we can roughly estimate the federal long-term capital gains tax that Durant should pay:
Total investment cost:
650*3,000=1,950,000 USD
Taxable income:
350,000,000-1,950,000-15,000=348,035,000 USD
First tax payment:
48,350*0%=0 USD
Second tax:
(533,400-48,350)*15%=$72,757.5
The third tax:
(348,035,000-533,400)*20%=$69,500,320
Total tax amount:
=0+72,757.5+69,500,320=69,573,077.5 USD
From this we can see that Durant will need to pay approximately $70 million in federal long-term capital gains tax in 2025.
In addition, the United States also imposes net investment income tax (NIT) on high-income people.Article 1411 of the Internal Revenue Code provides that NIIT applies a tax rate of 3.8% for certain net investment income of individuals, estates and trusts whose income exceeds the statutory threshold.If a single individual has net investment income and the adjusted gross income (MAGI) exceeds US$200,000, the net investment income is required.According to regulations, we can roughly estimate the net investment income tax that Durant needs to pay:
(350,000,000-1,950,000)*3.8%=$13,225,900
Therefore, Durant also needs to pay a net investment income tax of approximately $13,225,900 to the federal government.
2.2 State Tax
Durant has to pay taxes to the federal government and possibly to the state where he is located.Durant lives in California, and he was traded to the Houston Rockets on July 6, 2025, which is located in Texas.So, he might have to pay long-term asset gains tax to California or Texas—but who exactly should he pay the tax?
California comprehensive facts and Circumstances Test to determine whether a resident has a tax resident status in the state.In practice, the California Chartered Tax Commission is usually judged based on factors such as the stay time between California and other states, family, spouse, and children’s state; while Texas does not impose state personal income tax, so there is no problem of state tax resident certification in the issue of income tax.Durant lives in California for a long time and is not in Texas, where the Rockets are located in September this year, and his family is still living in California. California is likely to determine that he is still closely linked to California, so Durant is more likely to still pay the capital gains tax on this Bitcoin to California.
California is a high-tax state, and capital gains are taxed as income, and does not distinguish between short-term or long-term gains.This means that in California, the capital gains tax rate is calculated as state income tax and is calculated as state income tax rate.California has nine tax levels for personal income tax. According to California’s 2024 regulations on state personal income tax, taxable income exceeds $721,314 will be 12.3%.As an NBA star, Durant’s annual income should be far more than $721,314.California’s personal income tax adopts an excess progressive tax rate system, combined with the latest state deduction of $5,540, Durant is about to pay:
70,116.38+(350,000,000-1,950,000-55,40-721,314)*12.3%
=$42,790,863.338
So California may charge nearly $42.8 million in state taxes on Duran Characters.
In contrast to California, Texas does not tax capital gains taxes.
To sum up, if Durant pays taxes to California, he will have to pay a total of approximately 69,573,077.5+13,225,900+42,790,863.338=125,589,840.838, or nearly $126 million, at this time, the comprehensive tax rate is 20% + 3.8% + 12.3% = 36.1%; if he pays taxes to Texas, he only needs to pay the federal long-term capital gains tax of 69,573,077.5+13,225,900=82,798,977.5, or about $83 million, and the comprehensive tax rate is 20% + 3.8% = 23.8%.
3. Conclusion
From an NBA superstar to a Bitcoin “diamond player”, Durant’s luck and success are enviable.In fact, the crypto market is always full of surprises and opportunities. Whether it is to step on the trend with luck, wait for the market cycle by patience, or layout the new track with a forward-looking vision, there are people who have gained more wealth returns in the crypto market than expected.At the same time, with the rapid development of the crypto market and the increasingly mature regulatory systems of various countries, the taxation issue of crypto assets has received more and more discussions and attention.In fact, crypto assets are not a “gray tool” that can evade tax obligations. From “Bitcoin Jesus” Roger Ver to micro-strategy founder Saylor, cases of tax evasion penalties involving crypto assets are also common.From the perspective of long-term interests and compliance risks, whether for NBA superstars, Crypto Founder or meme players, the tax issues of crypto assets deserve more attention, so as to maximize personal wealth while avoiding compliance risks.
