How Is Crypto Taxed in the US? IRS Rules & Rates 2026

Market chart on screen — how crypto is taxed in the US

Short answer: Yes — in the US you pay tax on crypto. The IRS treats cryptocurrency as property under Notice 2014-21, not currency. Selling, swapping or spending crypto triggers capital gains tax: 0%, 15% or 20% long-term if you held over one year, or 10%–37% short-term. Receiving crypto as pay, mining, staking or airdrops is ordinary income, taxed on its dollar value the day you receive it.

Last updated: November 7, 2026. Facts checked against IRS.gov.

Why does the IRS treat crypto as property?

The starting point for everything on this site: since IRS Notice 2014-21, the IRS treats cryptocurrency as property, not currency. That single decision drives almost every rule that follows.

What are the two kinds of crypto tax?

Two kinds of tax can apply. (1) Capital gains tax when you dispose of crypto — sell it, swap it, or spend it — for more or less than you paid. Hold it over one year and you get long-term rates of 0%, 15%, or 20%; a year or less means short-term rates of 10%–37%, the same as salary. (2) Income tax when you receive crypto — pay, mining, staking rewards, airdrops — taxed on its dollar value the day you receive it.

What isn’t taxed — and what always is?

Not taxable by itself: buying with dollars and holding, and moving coins between wallets you own. Always reportable: every disposal goes on Form 8949 and Schedule D, and every filer must answer the digital-asset question on Form 1040.

Why should I keep records of every trade?

Keep records of every trade — date, dollars paid, dollars received, fees. With Form 1099-DA reporting now live (see our 1099-DA guide), the IRS increasingly already has your sales data; your records are how you prove your cost basis and pay only what you actually owe.

Frequently asked questions

Do I pay tax on crypto if I only bought and held?

No. Buying crypto with dollars and holding it is not taxed by itself. Tax applies when you dispose of it — sell, swap or spend — or when you receive crypto as income.

How does the IRS classify cryptocurrency?

As property, not currency, since IRS Notice 2014-21. That single classification drives almost every crypto tax rule that follows.

What is the crypto question on Form 1040?

Every filer must answer the digital-asset question on Form 1040 — whether or not they owned crypto. Leaving it unanswered is a red flag.

Do I pay tax on crypto-to-crypto swaps?

Yes. Swapping one crypto for another is a disposal, taxed as a capital gain (or loss) at 0%, 15% or 20% long-term, or 10%–37% short-term.

Related guides

Sources

IRS Notice 2014-21 — IRS.gov digital assets
IRS Digital Assets page
IRS Publication 544, Sales and Other Dispositions of Assets
Primary guidance: IRS.gov and IRS digital assets guidance

This guide is general education only — not tax, legal or financial advice. Verify with the source authority and a qualified professional before filing.

How Crypto Is Taxed in the US: The Complete 2026 Beginner’s Guide