Crypto taxes for 2026: what is taxable and how to report it

For tax purposes, crypto is property, not currency. Selling it, trading it or spending it can create a gain or loss, and earning it is income. Here is what counts and what changes with the new Form 1099-DA.

By Your Best Editorial Team Updated October 2026

General information, not tax advice. Based on IRS guidance on digital assets (checked October 15, 2026).

Taxable or not?

Transaction	Tax result
Buy with dollars and hold	Not taxable
Move between your own wallets or accounts	Not taxable (a fee paid in crypto is a small disposal)
Sell for dollars	Capital gain or loss
Trade one coin for another	Capital gain or loss on the coin you gave up
Spend it on goods or services	Capital gain or loss
Staking or mining rewards	Ordinary income at fair market value when you get control of them
Paid in crypto for work	Wages, or self-employment income for contractors
Airdrop after a hard fork	Income if you receive new coins
Receive as a gift	Not income until you sell
Donate to a qualifying charity	No gain or loss

Short-term vs long-term

Held one year or less, a gain is short-term and taxed at your ordinary rates. Held more than a year, it is long-term and taxed at 0%, 15% or 20%. For a single filer with $70,000 of wages, a $10,000 long-term crypto gain adds about $1,500 of federal tax; the same gain short-term adds about $2,200. Run your own numbers in the capital gains tax calculator.

The digital asset question

Form 1040 asks whether, at any time during the year, you received a digital asset (as a reward, award or payment) or sold, exchanged or otherwise disposed of one. Answer Yes if you sold, traded, spent, earned, staked, mined or paid a fee in crypto. Answer No if you only bought with dollars, held, or moved coins between your own wallets.

Form 1099-DA

Crypto brokers (exchanges, hosted wallets, kiosks and some payment processors) now report your sales to the IRS on Form 1099-DA:

Gross proceeds for sales from 2025.
Cost basis for sales from 2026 of "covered" assets, generally ones bought on or after January 1, 2026 and kept at the same broker.
Small stablecoin sales may not appear: brokers can skip them when your total for the year is $10,000 or less.

Decentralized (non-custodial) platforms that never hold your coins don't issue the form. You must report every taxable transaction whether or not you get a 1099-DA. See 1099-DA in our 1099 guide.

Basis and wallet-by-wallet tracking

Your basis is generally what you paid in dollars, including fees; for coins you earned, it is their value when you received them. From 2025, basis is tracked separately for each wallet or exchange account, not across everything you own. If you don't identify which units you sold, the IRS treats the earliest units as sold first (first in, first out). Keep records of each purchase, the date and time, the number of units and the dollar value.

Where it goes on your return

Sales and trades: Form 8949 and Schedule D.
Staking, mining, airdrops and other income: Schedule 1 (or Schedule C if it is a business, with self-employment tax).
Paid as an employee: wages on Form 1040; as a contractor: Schedule C.
Gifts you gave over the annual exclusion: Form 709.

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Frequently asked questions

Is buying crypto taxable?

No. Buying with dollars and holding is not taxable, and neither is moving coins between wallets or accounts you own. Tax applies when you sell, trade, spend or otherwise dispose of it, or when you receive it as income.

Is trading one coin for another taxable?

Yes. Exchanging one digital asset for another is a disposal of the first one, so you have a gain or loss measured in dollars, even though no cash changed hands.

What if I paid a network fee in crypto?

Paying a transaction fee with a digital asset is itself a disposal of that asset, so it can create a small gain or loss, and it means answering "Yes" to the digital asset question.

I lost money on crypto. Can I deduct it?

Yes. Capital losses offset gains, and up to $3,000 a year ($1,500 married filing separately) of losses beyond your gains offsets other income. The rest carries forward.

My 1099-DA has no cost basis. What do I do?

That is expected for coins bought before 2026 or moved in from another wallet. You still report the sale on Form 8949 with your own basis from your purchase records. Keep those records.

Are crypto gifts and donations taxable?

Receiving crypto as a genuine gift is not income; you pay tax when you sell it, generally using the giver's basis. Donating crypto to a qualifying charity does not trigger gain or loss, and may be deductible if you itemize.

Did the IRS send me a "Digital Assets Compliance Portal" letter?

No. The IRS warns that letters with a QR code asking you to register crypto on a compliance portal are a scam. The IRS does not require registration of digital assets.