# How Crypto Taxes Work in the US (2026 Guide)

**By Hasan Şentürk** · Published September 1, 2026 · Updated September 15, 2026



The IRS has treated crypto as property since 2014, and that one decision shapes everything about how you file. Sell Bitcoin for a profit, and you owe capital gains tax. Receive staking rewards, and the IRS wants its share of that income too. Swap one token for another? That's a taxable event, even though no dollars touched your account.

This guide walks through the 2026 US crypto tax rules with real numbers, so you know what to report, what to track, and where most people slip up. It's not tax advice; it's the framework the IRS uses, laid out plainly.

## Key Takeaways

- **Every sale, swap, or spend of crypto is a taxable event**, even crypto-to-crypto trades.
- **Holding period decides your rate:** under a year means ordinary income rates (up to 37%), over a year means long-term rates (0%, 15%, or 20%).
- **Mining, staking, and airdrops are taxable income** at their fair market value when received.
- **Form 8949 + Schedule D** is where most crypto activity gets reported. Broker-reported crypto trades arrive on **Form 1099-DA**.
- **Tax loss harvesting works with crypto**: you can offset gains (and up to $3,000 of ordinary income) with realized losses.

## What Counts as a Taxable Event?

The IRS's position, laid out in [Notice 2014-21](https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions), treats virtual currency as property. From there, the rules are the same as selling a stock or a house:

| Event | Taxable? |
|---|---|
| Selling crypto for USD | Yes: capital gain/loss |
| Trading crypto for another crypto | Yes: treated as sell + buy |
| Buying goods/services with crypto | Yes: like selling at that moment |
| Receiving crypto as payment for work | Yes: ordinary income |
| Mining rewards | Yes: ordinary income at receipt |
| Staking rewards | Yes: ordinary income at receipt |
| Airdrops (free tokens) | Yes: ordinary income at receipt |
| Buying crypto with USD and holding | No: nothing happens yet |
| Transferring between your own wallets | No, but keep records to prove it |

The crypto-to-crypto rule surprises the most people. Swapping BTC for ETH isn't "holding": the IRS sees you selling BTC and buying ETH. The gain or loss on the BTC leg is taxable at that moment, even if you never touched a bank account.

## How Capital Gains Are Calculated (With a Real Example)

Your gain or loss is simply:

```
Gain/Loss = Fair Market Value at Sale − Cost Basis
```

Cost basis is what you paid, including fees. If you bought in multiple batches, the IRS accepts specific identification: you choose which units you're selling, and you must document it at the time of the trade.

Here's a concrete example, using numbers that reflect 2026 levels:

| Detail | Value |
|---|---|
| Bought 0.5 BTC | $60,000 (cost basis) |
| Sold 0.5 BTC for USD | $95,000 |
| Held for | 14 months (long-term) |
| Gain | $35,000 |
| Long-term rate (15% bracket) | $5,250 tax owed |

Same trade held for 9 months instead of 14? That $35,000 gain is taxed at your ordinary income rate; for someone in the 24% bracket, that's $8,400. **Holding longer than a year is worth thousands of dollars in many cases.**

### 2026 Long-Term Capital Gains Rates (Single Filer)

| Taxable Income | Rate |
|---|---|
| Up to $48,350 | 0% |
| $48,351 – $533,400 | 15% |
| Over $533,400 | 20% |
| High earners add | +3.8% Net Investment Income Tax |

The official brackets are in the [IRS capital gains guidance](https://www.irs.gov/publications/p544) and are adjusted annually for inflation.

## Income Crypto: Mining, Staking, Airdrops

These are taxed as **ordinary income** at the fair market value of the coins when you received them. That becomes your cost basis for when you later sell them.

- **Mining:** income at receipt, then capital gains treatment on the eventual sale.
- **Staking:** the IRS's position (from [Revenue Ruling 2019-24](https://www.irs.gov/irb/2019-44_IRB)) is that staking rewards are income when you gain dominion and control over them.
- **Airdrops:** same logic: free tokens are income at their value on the day you control them.

The order matters: report the income first (on Schedule 1), then track the new basis, then report the later sale as a capital transaction.

## How to Report: Form 8949 and Schedule D

Every sale, swap, or disposal of crypto gets listed on [Form 8949](https://www.irs.gov/forms-pubs/about-form-8949), then the totals roll into Schedule D with your other capital gains.

Since 2025, crypto brokers (exchanges, custodial wallets) must report covered transactions on **Form 1099-DA**; the first 1099-DA filing season is underway for 2026. Your exchange should provide this form. **Don't just copy the 1099-DA blindly**: check your cost basis against your records, because brokers only report what happened on their platform.

Don't have the forms yet? Your exchange's transaction history CSV is enough to build the numbers, as long as you convert each transaction to USD at the time of the trade.

## Crypto Tax Loss Harvesting

Yes, it works with crypto. Realized losses offset realized gains dollar-for-dollar, and if losses exceed gains, up to $3,000 can offset ordinary income each year, with the remainder carrying forward.

Example: you sold ETH at a $10,000 loss and BTC at a $7,000 gain. Net loss: $3,000, which offsets $3,000 of your salary income.

Watch the **wash sale rule**, or rather, its absence. Unlike stocks, the wash sale rule does not apply to crypto (as of the 2026 tax year), so you can sell at a loss and buy back immediately. That's been a recurring legislative proposal, so check current guidance before you plan around it. Our [US crypto tax rules guide](/us-crypto-tax-rules/) covers what must be reported in more depth.

## Common Mistakes People Make

- **Not tracking cost basis per purchase**: you'll pay more tax than you owe, or struggle to prove what you owe.
- **Forgetting crypto-to-crypto swaps are taxable**: the biggest surprise audit trigger.
- **Skipping small transactions**: that $20 coffee paid in BTC is still a disposal.
- **Ignoring the tax software**: the cost of good crypto tax software is a deduction for many filers, and the time saved is enormous.
- **Mixing up US and UK/CA/AU rules**: this guide is US-specific. If you file outside the US, the rules are different.

## FAQ

**Do I have to pay tax on crypto I haven't sold?**
No. Holding crypto is not a taxable event; only disposals (sales, trades, spending) and income events (mining, staking, airdrops) trigger tax.

**Is crypto-to-crypto trading taxable?**
Yes. The IRS treats it as selling one asset and buying another; the gain on the sold asset is taxable at the moment of the trade.

**What is Form 1099-DA?**
The new IRS form crypto brokers use to report their customers' crypto transactions. The first filing season is underway in 2026, so your exchange may issue one for you.

**Can I deduct crypto losses?**
Yes, through tax loss harvesting: realized losses offset gains, and up to $3,000 of net losses can offset ordinary income per year.

**Do I need to report small crypto transactions?**
Yes. There's no minimum threshold for reporting crypto disposals, no matter how small.

## Sources

- [IRS: Frequently Asked Questions on Virtual Currency Transactions](https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions)

- [IRS Publication 544: Sales and Other Dispositions of Assets](https://www.irs.gov/publications/p544)

- [IRS Revenue Ruling 2019-24 (staking)](https://www.irs.gov/irb/2019-44_IRB)

- [IRS Form 8949 and instructions](https://www.irs.gov/forms-pubs/about-form-8949)

*Tax rules change; verify current guidance with a tax professional before filing.*

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Source: https://financetrekker.com/crypto-tax-guide/