How crypto capital gains work
The IRS treats digital assets as property, not currency. Selling crypto for dollars, swapping one coin for another, or using crypto to buy goods or services can each realise a gain or loss equal to fair market value minus your adjusted basis in the units disposed.
Holding period still matters. Crypto held more than one year generally qualifies for long-term capital gains rates; shorter holds are taxed as ordinary income. High earners may also owe NIIT. Because every trade can be a taxable event, active traders often have many lots — our calculator estimates a single disposition for planning, while software or a CPA may be needed for full transaction history.
Wash-sale disallowance currently applies more clearly to stocks and securities than to cryptocurrency. That difference can affect loss-harvesting strategy, but tax law can change — verify current IRS guidance before relying on crypto-specific harvesting tactics.
Most states that tax capital gains also tax crypto gains. Pair this page with a state calculator and our methodology notes. Estimates are educational only and not tax advice.
Also see
Other calculators, how we model the numbers, and IRS Topic 409.