The short answer
The IRS treats crypto as property, like stock. Buying and holding isn't taxable. Selling, trading one coin for another, or spending it is, and so is crypto you receive as pay or rewards.
Last reviewed: October 2026
This page explains how taxes and reporting work. It isn't a recommendation to buy, sell or hold any investment.
Taxable
- Selling crypto for dollars
- Trading one crypto for another
- Paying for something with crypto
- Getting paid in crypto, or earning staking or mining rewards (income when you receive it)
Not taxable
- Buying crypto with dollars and holding it
- Moving it between your own wallets or accounts
- Receiving it as a gift (the giver may have a gift tax filing if it's large)
How gains are figured
Your gain or loss is what you got minus what you paid (your basis). Held more than a year, it's a long-term gain at lower rates. See capital gains. Sales go on Form 8949 and Schedule D, and every return asks a yes-or-no digital asset question.
The new Form 1099-DA
Exchanges now send Form 1099-DA. For many 2025 sales it shows the sale amount but not what you paid. Cost basis reporting is phasing in for crypto bought in 2026 and later. Keep your own records of purchases, especially for coins moved between exchanges, or the IRS may see only the sale amount.
Official source: IRS: Digital assets.
More Tax Answers
See all of our plain-English tax answers, or book Free Tax Office Hours to ask your own question.
Disclaimer: This page is general information, not tax advice. Every situation is different, and tax rules change. Reading this page doesn't make you a client.