I buy 100 USDC. I use these to buy some crypto-currency. 6 months later, I sell the crypto-currency for USDC, making a 10% profit. I sell the USDC for USD. Notice that I have made no profit from the sale of USDC, which is (supposedly) the only taxable event in this series of transactions. I bought 110 USDC worth $1 each, and sold 110 USDC worth $1 each. And I don't even have to sell the USDC for USD, I can buy stuff directly with USDC.
No no, you pay not the gain of transaction, you pay tax for the whole amount.
And then deduct the amount of fiat you used to buy crypto.
So, you buy 100 USDC for $100 - you report that in your tax information (for use in following years tax deduction).
Then some time ago, you sell 110 USDC for $120, you pay tax for the amount $120 - $100 (unless the $100 was used year earlier, then you can use just $50 as a cost).
If you didn't report any costs (meaning buying crypto) you pay tax for the whole $120 amount.
