Crypto taxes: the basics (US)
What the IRS treats as taxable, what isn't, and the new reporting forms from exchanges.
In the US, the IRS treats crypto as property. Selling it, trading one crypto for another, or spending it can create a taxable gain or loss. Crypto you receive as income, such as pay or staking rewards, is taxed as income. Simply buying with dollars and holding isn't taxable.
This is a general overview of US federal rules as of October 2026. Your situation, your state and future rule changes matter. Check IRS guidance or a tax professional.
What's taxable and what isn't
| Usually a taxable event | Usually not taxable by itself |
|---|---|
| Selling crypto for dollars | Buying crypto with dollars |
| Trading one crypto for another (BTC → ETH) | Holding crypto, even if its price rises |
| Spending crypto on goods or services | Moving crypto between your own wallets |
| Receiving crypto as pay, or from mining, staking or most airdrops (taxed as income) | Giving crypto as a gift (gift-tax rules may apply to large gifts) |
Capital gains
Your gain or loss is what you received minus your cost basis (what you paid, including fees). Held more than one year: long-term rates of 0%, 15% or 20%, depending on your income. Held one year or less: taxed at your ordinary income rate.
Losses can offset gains, and up to $3,000 of net capital losses a year can offset other income, with the rest carried forward.
Forms and reporting
- The front of Form 1040 asks every filer whether they received, sold, exchanged or otherwise disposed of a digital asset.
- Sales and trades go on Form 8949 and Schedule D.
- Form 1099-DA: crypto brokers now report to the IRS. For sales in 2025 they report gross proceeds; for assets bought from January 1, 2026, they also report your cost basis.
- Since January 1, 2025, cost basis has to be tracked separately for each wallet or account, not pooled across all of them.
Keep records
For each purchase and sale, keep the date, amount, price, fees and which wallet or exchange. Exchange downloads plus crypto tax software can do much of the work. The profit calculator helps check individual trades.
Frequently asked questions
Do I pay tax if I don't sell?
Generally no. Just holding crypto, even as it rises, isn't a taxable event under US federal rules.
Is swapping one crypto for another taxable?
Yes. The IRS treats it as selling the first crypto, so any gain or loss is reportable.
Are staking rewards taxed?
Yes, as ordinary income at their fair market value when you gain control of them. Selling them later can create a separate gain or loss.
What is Form 1099-DA?
A new form that crypto brokers send to customers and the IRS reporting digital asset sales. It starts with sales made in 2025.
Where to next
Sources
Written for beginners and checked against the sources listed. Last reviewed October 26, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.