> Is it when you buy a boat with bitcoin?
That would be taxed as a barter exchange. It's basically the same as selling the crypto and then paying with USD. You are taxed on the fair market value of the boat that exceeds the amount that you paid for the crypto or it's fair market value when you received it for your services if it was income (that's your basis in the asset). In addition, depending on the state, there may be sales tax implications for one or both parties.
This is why people don't pay their rent with stock. It would be an absurd loophole if you could avoid paying income tax simply because you never touched cash.
But to answer your question more generally, income is taxed when a taxable event occurs, as I stated in my previous post. It varies depending on whether the taxpayer is an accrual method or cash method taxpayer, but as an individual you are on the cash method, which means income is taxable when received.
The tricky part is defining income. In Commissioner v. Glenshaw Glass Co., the Supreme Court held that income means, "[1] undeniable accessions to wealth, [2] clearly realized, and [3] over which the taxpayers have complete dominion." It later held in Helvering v. Bruun that "the realization of gain need not be in cash derived from the sale of an asset."
So anything that meets those three tests qualifies as income, regardless of whether it was converted to cash at any point in the transaction. If someone gives you a bunch of bitcoin in exchange for your services, you have clearly gained something of value, which you have received into your possession, and over which you have complete and undisputed control. Thus, it is immediately taxable at its fair market value when received, and likely as ordinary income and not as capital gains (otherwise everyone would pay all of their employees in some liquid asset so that they don't have to pay payroll taxes and can pay the lower capital gains rate). Bad luck for you if the value immediately crashes to zero and never recovers because you still owe tax on the full amount at the time it was received.
If you purchase bitcoin, that is not an accession to wealth which has been realized, because the value can just as easily decline and it is only worth whatever you paid for it at that time. This is also true for subsequent increases in the value of bitcoin you receive in exchange for services. So you are not taxed on BTC price fluctuations, even when the bitcoin increases in value. When you exchange appreciated bitcoin to someone else for something of value, whether USD or GPB or barter, you have realized the increase in value of the bitcoin and then will owe taxes on that increase. In that case, the excess of the FMV of the sale over the basis will be taxed at capital gains, regardless of whether you initially received the BTC as payment for services or purchased it.