Crypto Tax Guide 2026
Everything you need to know about IRS cryptocurrency taxation
IRS Crypto Treatment
The IRS treats cryptocurrency as property, not currency. This means capital gains tax rules apply when you dispose of crypto.
Capital Gain/Loss = Proceeds - Cost Basis
Taxable Events
- •Selling crypto for fiat
- •Trading crypto to crypto
- •Spending crypto on purchases
- •Receiving staking/mining rewards
- •Getting paid in crypto
- •Airdrops and hard forks
Non-Taxable Events
- •Buying crypto with fiat
- •Transferring between your wallets
- •Gifting (under $19K annual limit)
- •Donating to charity
- •HODLing (unrealized gains)
Cost Basis Methods
FIFO
First In, First Out
Sell oldest coins first (IRS default)
LIFO
Last In, First Out
Sell newest coins first
Specific ID
You choose which coins
Most tax-efficient, needs records
IRS Forms for Crypto
Form 8949
Report each crypto sale/trade with date, proceeds, cost basis, gain/loss
Schedule D
Summary of capital gains/losses from Form 8949
Schedule 1
Mining/staking income reported as 'Other Income'
Schedule C
If crypto is part of a business
Mining & Staking Rewards
Mining and staking rewards are taxed as ordinary income at fair market value when received.
You owe income tax when you receive rewards, plus capital gains tax when you sell.
Tax-Loss Harvesting
Sell crypto at a loss to offset gains. Unlike stocks, crypto is NOT currently subject to wash sale rules (as of 2026).
- • Losses offset gains dollar-for-dollar
- • Up to $3,000 in losses can offset ordinary income
- • Excess losses carry forward to future years
Advertisement
Tax laws change frequently. Consult a crypto tax professional.