How Is Crypto Taxed?

In the US, the IRS treats crypto as property, not currency -- so the same capital gains framework used for stocks generally applies: you owe tax on the gain when you sell, trade, or spend it, not when you simply buy and hold. Rules differ by country, so check your local tax authority's guidance.

Generally no -- in property-based tax regimes like the US, simply buying and holding crypto isn't a taxable event. The gain or loss is only realized (and taxable) when you sell, trade, or spend it. Buying more, or watching the price move, doesn't trigger anything on its own.

In the US, a gain is short-term if you held the asset for one year or less, and long-term if you held it for more than one year. Long-term gains are usually taxed at a lower rate than short-term gains, which are typically taxed as ordinary income.

Generally yes, in jurisdictions that tax crypto as property (like the US) -- a crypto-to-crypto trade is treated as selling the first asset (triggering a gain or loss) and buying the second. Holding cash out of it isn't what triggers the tax event.

FIFO (first-in-first-out) assumes that when you sell part of your holdings, you're selling your oldest coins first. It's the default assumption many tax authorities use unless you specifically identify which lot you sold (specific identification), which usually requires detailed records at the time of each sale.

They're different assumptions about which lot you sold: FIFO sells the oldest coins first, LIFO sells the newest first, and HIFO (highest-in-first-out) sells the most expensive lot first to minimize the reported gain. Not every method is allowed everywhere -- this calculator only supports FIFO, the most commonly defaulted-to method.

In many jurisdictions, yes -- realized capital losses can typically offset realized capital gains (and sometimes a limited amount of ordinary income), which is why some investors deliberately sell underwater positions before year-end. This depends heavily on local rules, so confirm with a tax professional before relying on it.

No. It only computes gain/loss and holding-period classification from the buys and sells you enter, entirely in your browser. It does not calculate tax owed, doesn't know your income bracket or filing status, and isn't a substitute for a tax professional or filing software.

Form 1099-DA is a new IRS form that crypto exchanges and other "brokers" send starting with 2025 transactions (arriving in early 2026), reporting your gross proceeds from sales to both you and the IRS. For 2025 transactions, brokers generally aren't required to report your cost basis -- so the form can show only proceeds, making the number look far larger than your real taxable gain. Basis reporting is expected to phase in for transactions from 2026 onward. Don't assume the 1099-DA reflects your final gain -- calculate your own cost basis (like with this tool) and reconcile the two.