Crypto Capital Gains Tax (2026)
The IRS treats crypto as property, so every sell, swap, or spend is a taxable event. Enter your cost basis, proceeds, and dates — the tool derives short vs long-term and shows the exact 2026 tax, the bracket it used, and the IRS source behind it.
Reviewed & updated · 2026 tax-year figures · Federal + optional state
Cryptocurrency is property (IRS Notice 2014-21), so selling, swapping, or spending it triggers a capital gain or loss — gain = proceeds − cost basis. Held one year or less, it is short-term and taxed as ordinary income (10%–37%). Held more than one year, it is long-term at 0%, 15%, or 20% under IRC §1(h). High earners add the 3.8% NIIT (§1411). Note: the wash-sale rule (§1091) currently does not apply to crypto — but that could change.
Net proceeds $16,200$1,800
Show our work the exact math
Estimates only, for the 2026 tax year. Not tax advice. This tool computes a single lot; with many disposals your broker/exchange 1099-DA and cost-basis method (FIFO or specific ID) determine each lot's basis. Dollar thresholds marked est. are projected 2026 figures.
Is cryptocurrency taxed as capital gains or income?
Both — it depends on the transaction. Since 2014 the IRS has classified virtual currency as property, not currency, in Notice 2014-21. That single decision drives everything:
- Disposing of crypto you already own (selling for cash, swapping for another coin, or spending it) produces a capital gain or loss — the subject of the calculator above.
- Receiving new crypto as pay, from staking, or via an airdrop is ordinary income at fair market value on the date you control it, and that value becomes your future cost basis.
Which crypto transactions are taxable events?
Because crypto is property, a disposal is any transfer of it for something of value. Buying and holding is not. Here is how the common actions break down:
| Action | Taxable? | Treatment |
|---|---|---|
| Sell crypto for USD | Yes | Capital gain/loss = proceeds − basis (§1(h)) |
| Swap one coin for another (e.g. ETH→SOL) | Yes | Disposal of the first coin at fair market value (Pub 544) |
| Spend crypto on goods/services | Yes | Disposal at the coin's FMV when spent |
| Receive staking rewards | Yes | Ordinary income at FMV (Rev. Rul. 2023-14) |
| Receive an airdrop / hard-fork coins | Yes | Ordinary income at FMV when you control it (Rev. Rul. 2019-24) |
| Get paid in crypto for work | Yes | Ordinary/wage income at FMV received |
| Buy crypto with USD and hold | No | No event until you dispose of it |
| Move crypto between your own wallets | No | Not a disposal — no change in ownership |
| Gift crypto (under the annual exclusion) | No | Generally no gain to you; recipient takes your basis |
Short-term vs long-term: how the holding period changes your bill
The single biggest lever on crypto tax is time. Measure from the day after acquisition to the disposal date:
- Held one year or less → short-term. Taxed as ordinary income at your marginal rate, 10%–37% (IRS Topic 409).
- Held more than one year → long-term. Taxed at 0%, 15%, or 20% under IRC §1(h) — often less than half the short-term rate.
On a $12,000 gain, a top-bracket short-term seller can owe roughly $4,440 (37%), while the same gain held past a year may cost $1,800 (15%). The calculator above shows the difference the moment you flip the term toggle.
Does the wash-sale rule apply to crypto?
As of 2026, no — and that is a meaningful, if fragile, advantage. The wash-sale rule in IRC §1091 disallows a loss when you sell a stock or security and buy it back within 30 days. The IRS has not classified most cryptocurrency as a security, so §1091 generally does not reach crypto. In practice that lets a holder sell a coin at a loss, claim the loss to offset other gains, and repurchase the same coin minutes later.
Which cost-basis method should I use?
When you hold several lots of the same coin bought at different prices, the method decides which basis applies to a sale:
- FIFO (first-in, first-out) — the default. The oldest units are sold first. Simple, but in a rising market it tends to surface the largest gains.
- Specific identification — allowed if you can document exactly which units you sold (acquisition date, cost, and disposal). This enables HIFO-style selling (highest cost first) to minimize the current gain. See IRS Publication 544 and the IRS digital-asset guidance.
Whatever you choose, keep per-lot records. Beginning in 2025, brokers report on Form 1099-DA, and the IRS expects wallet-by-wallet basis tracking. The calculator here models one lot at a time so you can price a single disposal precisely.
How this calculator works & where the numbers come from
No black box. The tool applies four steps: (1) net gain = proceeds − cost basis; (2) classify by holding period from your dates; (3) for long-term gains, subtract the standard deduction from your ordinary income and stack the gain across the 0/15/20% bands per IRC §1(h); (4) add the 3.8% NIIT where modified AGI crosses the §1411 threshold. Short-term gains are computed as the true marginal difference — ordinary tax with the gain minus ordinary tax without it — not a flat top-rate shortcut. The crypto-specific rules above (property treatment, disposals, staking income, wash-sale) come from IRS Notice 2014-21, Pub 544, and Rev. Rul. 2023-14.
CHECK
Primary sources (linked, not just named)
- IRS Notice 2014-21 — virtual currency is property
- IRS Publication 544 — Sales & Dispositions of Assets
- IRS — Digital Assets guidance & FAQ
- Rev. Rul. 2023-14 — staking rewards income
- 26 U.S.C. §1091 — wash-sale rule (stocks/securities)
- 26 U.S.C. §1(h) — capital gains rates
- 26 U.S.C. §1411 — 3.8% NIIT
- IRS Topic No. 409 — Capital Gains and Losses
Crypto capital gains tax, answered
How is crypto capital gains tax calculated in 2026?
Your gain is proceeds (the USD value you received) minus cost basis (what you paid plus fees), taxed by holding period.
Because crypto is property (Notice 2014-21), each disposal is a taxable event. Held ≤ 1 year → short-term, ordinary income (10%–37%). Held > 1 year → long-term, 0/15/20% under IRC §1(h). High earners add the 3.8% NIIT (§1411).
Is swapping one crypto for another a taxable event?
Yes. Trading ETH for SOL is a disposal of your ETH at its fair market value, per Notice 2014-21 and Pub 544. You realize a gain or loss on the coin you gave up, even though no dollars changed hands. The received coin starts a new holding period at that value.
Does the wash-sale rule apply to crypto?
As of 2026, generally no. The wash-sale rule (IRC §1091) covers stock and securities, and most crypto is not classified as a security, so a loss is not disallowed when you rebuy immediately. Congress has repeatedly proposed extending §1091 to digital assets, so confirm current law before relying on it.
How are staking rewards and airdrops taxed?
As ordinary income at fair market value on the date you gain control of the tokens (Rev. Rul. 2023-14 for staking; Rev. Rul. 2019-24 for airdrops/forks). That value becomes your basis; a later sale is a separate capital gain or loss measured from it.
What cost-basis method can I use for crypto?
FIFO is the default; specific identification is allowed with records. Specific ID lets you sell your highest-cost units first to reduce the current gain. Keep acquisition date, cost, and disposal for each lot — brokers now issue Form 1099-DA and the IRS expects per-wallet tracking (Pub 544).
Do I owe crypto tax if I only bought and held?
No. Buying with USD and holding is not taxable, and moving crypto between your own wallets is not a disposal. Tax applies only when you sell for cash, swap for another coin, or spend it. Run your numbers in the calculator once you actually dispose.
Why trust this over an exchange's estimate?
Exchanges are great at showing your balance and terrible at showing the tax logic behind it. We flipped that. The tool loads first, shows its arithmetic, and links the actual IRS notice and code section for every claim. If a figure is a 2026 projection, we say so. We do not pretend the wash-sale gap is permanent, and we do not gate the answer behind an email. That is the whole pitch.