Short answer: The one-year line decides your crypto tax rate. Sell after holding more than one year and the gain is long-term, taxed at 0%, 15% or 20% depending on taxable income. Sell at one year or less and it is short-term, taxed at your ordinary rate of 10%–37%. The clock starts the day after you acquire each lot and includes the day you sell — swapping coins is a sale that restarts nothing.
Last updated: November 7, 2026. Facts checked against IRS.gov.
When does the holding period start and end?
Your holding period starts the day after you acquire crypto and includes the day you sell it. Sell after holding more than one year and the gain is long-term: taxed at 0%, 15%, or 20% depending on your taxable income (plus a possible 3.8% Net Investment Income Tax at higher incomes). Sell at one year or less and it’s short-term: taxed at your ordinary rate, 10%–37%.
How much can one year save me?
Example: a $10,000 gain could cost $3,700 short-term at the top rate, $2,000 long-term — a $1,700 difference for waiting. The same clock applies per purchase lot, which is why lot selection (see our cost basis methods guide) matters: selling your oldest lots first often converts gains to long-term.
What traps should I watch for?
Watch the traps: swapping into another coin restarts nothing — it’s a sale. And gifts and inherited crypto have their own holding-period rules (see our gifting, donating and inheriting guide). When a sale is days away from the line, check the exact acquisition date in your records before you trade.
Frequently asked questions
What is the long-term capital gains rate for crypto?
Long-term gains are taxed at 0%, 15% or 20% depending on your taxable income, plus a possible 3.8% Net Investment Income Tax at higher incomes.
When does the holding period start?
The day after you acquire crypto, and it includes the day you sell it. Sell after holding more than one year and the gain is long-term.
Does swapping crypto restart the holding period?
No — swapping into another coin is itself a sale, not a restart. Swapping crypto restarts nothing.
Related guides
- How Crypto Is Taxed in the US: The Complete 2026 Beginner’s Guide
- Cost Basis Methods: FIFO, HIFO & Specific ID — Pick Before You Sell
- Crypto Tax-Loss Harvesting: How It Works & the Wash Sale Question
Sources
- IRS — Digital Assets
- IRS — Frequently asked questions on digital asset transactions
- IRS — Fact Sheet FS-2024-23: Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets
- IRS Topic No. 409 (Capital Gains and Losses) — IRS.gov
- 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.
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