How Crypto Taxes Work: US Basics

Updated 2026-10-30

Short answer: in the US, the IRS treats crypto as property, not currency. Selling, swapping or spending it can create a taxable gain or loss. Rewards you receive (staking, delegation, airdrops) usually count as income when you receive them. Exchanges now send a Form 1099-DA with your sale proceeds. Keep records of everything. This is general information, not tax advice: rules change and your situation matters, so check with the IRS or a tax professional.

When you might owe tax

Usually taxable:

Selling crypto for dollars.
Swapping one crypto for another (including through a DEX).
Spending crypto on goods or services.
Receiving rewards: staking and delegation rewards, and many airdrops, count as income at their value when you receive them.

Usually not taxable:

Buying crypto with dollars and holding it.
Moving crypto between wallets or accounts you own.

Gains and losses

Your gain or loss is what you got when you sold, swapped or spent, minus your cost basis (what you paid, including fees).

Held more than a year: a long-term gain, usually taxed at lower rates.
Held a year or less: a short-term gain, taxed like ordinary income.
Losses can offset gains, within limits.

Rewards you received have a cost basis equal to the value you reported as income, so selling them later can create a separate gain or loss.

Form 1099-DA from exchanges

US brokers, such as exchanges, now report crypto sales to you and the IRS on Form 1099-DA:

For 2025 sales, the form shows gross proceeds, generally without your cost basis.
From 2026, it also shows cost basis for crypto bought and held at the same broker from 2026 on. For coins bought earlier or moved in from elsewhere, you still supply the basis from your own records.
Proceeds aren't profit. The form shows what you received, not your gain.
Activity in your own wallet (DeFi, DEX swaps, rewards) generally isn't on any form, but it's still reportable.

Records to keep

For every purchase, sale, swap, reward and transfer: the date, the amount, the value in dollars at the time, fees, and the transaction ID. Rebuilding this years later is painful, so start now.

Crypto tax software can import your exchanges and wallet addresses and work out gains and income for you. Our Portfolio shows what each address holds today, which helps you list every wallet you use.

Do this

Keep records from day one: dates, amounts, values, fees and transaction IDs.
Treat rewards as income when you receive them, and note their value.
Expect a 1099-DA from US exchanges, and match it against your own records.
Use tax software or a tax professional for anything beyond simple buys and sells.