How Crypto Taxes Work in the US

In the eyes of the IRS, cryptocurrency isn't currency at all — it's property, like a stock or a house. That single classification drives almost everything about how crypto is taxed, and it surprises people who assumed moving coins around was invisible to the tax system.

What counts as a taxable event

• Selling crypto for dollars — you owe tax on the gain.
• Trading one coin for another — swapping ETH for SOL is a sale of the ETH.
• Spending crypto to buy goods or services — that's a disposal too.
• Earning crypto from staking, mining, or as payment — taxed as ordinary income at its value when received.

What is not taxable

Simply buying crypto with dollars and holding it triggers nothing. Neither does moving coins between your own wallets. Tax only arrives when you dispose of the asset or receive it as income.

Short-term vs long-term gains

Hold a coin for a year or less and any profit is a short-term gain, taxed at your ordinary income rate. Hold longer than a year and it becomes a long-term gain, taxed at the lower capital-gains rates (0%, 15%, or 20% for most people). Your cost basis — what you paid, including fees — is subtracted from the sale proceeds to find the gain.

Keep records of every purchase date, amount, and price; without basis records the IRS can treat your entire proceeds as gain. Estimate what you might owe with the calculators below.

This is general information, not tax advice — a complex crypto tax situation is worth reviewing with a qualified tax professional.