How crypto is taxed in the US (2026 guide)

The IRS treats cryptocurrency as property, not currency. That single rule explains most of crypto taxation: whenever you dispose of crypto, you have a gain or loss, just as you would selling a stock.

What's taxable and what isn't

Paying a network fee in crypto counts as a small disposal of that crypto. There is no small-transaction exemption in current law, though several bills have proposed one.

Short-term vs. long-term

How long you held the coin decides the rate:

• One year or less: short-term gain, taxed at your ordinary income rate, from 10% to 37%.
• More than one year: long-term gain, taxed at 0%, 15% or 20% depending on your taxable income.

For 2026, the 0% long-term rate applies to taxable income up to $49,450 for single filers and $98,900 for married couples filing jointly. The 20% rate starts above $545,500 (single) and $613,700 (joint). Higher earners may also owe the 3.8% net investment income tax once modified AGI passes $200,000 (single) or $250,000 (joint). Our tax estimator applies these brackets for you.

How a gain is calculated

Gain = what you received − your cost basis. Your cost basis is what you paid, including fees. If you bought 0.01 BTC for $860 plus a $10 fee, your basis is $870. Sell it for $1,000 minus a $10 fee and your gain is $120.

If you bought at several prices, the IRS matches each sale to specific purchases, first-in, first-out by default, unless you identify which units you sold. That's why records matter. See the average cost calculator for a quick overview of where you stand.

Losses

Losses offset gains. If your losses exceed your gains for the year, you can deduct up to $3,000 of the net loss against other income ($1,500 if married filing separately) and carry the rest forward with no time limit.

As of October 2026, the wash-sale rule, which stops stock investors from claiming a loss when they buy back within 30 days, does not apply to crypto. A House committee approved a bill in September 2026 that would extend it to digital assets, so this may change.

Staking and other income

Staking rewards are ordinary income at their market value when you gain control of them (IRS Revenue Ruling 2023-14). That value becomes your cost basis for those coins. The same applies to mining rewards, airdrops and crypto received as pay.

Form 1099-DA

US crypto brokers now send Form 1099-DA to customers and the IRS:

• 2025 transactions: gross proceeds only.
• 2026 transactions: gross proceeds plus cost basis for "covered" coins, meaning those bought on or after January 1, 2026 in an account at that broker.

Coins bought earlier, or transferred in from another wallet, won't have a basis on the form. You must still report them correctly, and the IRS will see the proceeds.

Reporting

Every disposal goes on Form 8949, with totals on Schedule D. Income from staking or similar activity goes on Schedule 1 (or Schedule C if it's a business). Form 1040 also asks every filer whether they received, sold, exchanged or otherwise disposed of a digital asset during the year. Answer "no" only if you just bought and held, or moved coins between your own wallets.