Cryptocurrency capital gains tax: what US filers owe
US tax law treats cryptocurrency as property, so capital gains tax applies when you sell, trade or spend it. Buying and holding is not taxable.
Vahe HakobyanEditor-in-chief
Updated Oct 5, 20263 min readFact-checked
On this page
- Report gains on IRS Schedule D for the sale year.
- Mining and staking rewards are ordinary income.
- Failing to report can lead to IRS penalties and interest.
The sale year decides which return you file. A Crypto Profit Calculator can help you find the gain or loss. lower capital gains tax on cryptocurrency covers other US tax rules.
What crypto events are taxable?
The IRS treats cryptocurrency as property, so a taxable event usually happens when you exchange it. The table shows which actions trigger tax and which do not.
How do you calculate and report gains?
Your cost basis is usually what you paid plus fees. Your gain or loss equals the amount you received minus your adjusted basis. Report the result for the sale year on IRS Schedule D.
Short-term vs long-term crypto gains
The holding period decides short-term vs long-term. If you held the crypto for one year or less, the IRS taxes the gain as short-term, like ordinary income. If you held it longer, long-term capital gains rates usually apply. Mining or staking income is ordinary income.
What happens if you don't report?
The IRS requires you to report digital asset transactions whether or not they produce a taxable gain or loss. Federal returns ask a digital asset question. If you owe tax and do not report it, the IRS can charge penalties and interest.
Frequently asked questions
Usually no. A transfer between wallets you control is not a sale, so it does not create a capital gain or loss.
You can report a capital loss on your return. The IRS says you must report digital asset transactions whether or not they produce a taxable gain or loss. A capital loss can offset capital gains.
Keep the date and amount you paid for each purchase, plus fees. When you sell, record the date and amount you received. For crypto received as income, keep the value on the day you received it.
