Crypto tax essentials

The IRS classifies cryptocurrency as property, so every disposal is a taxable event. Depending on how you earn or spend tokens, you may owe both ordinary income tax and capital gains tax.

Transaction categories

• Buys: Paying fiat currency for crypto establishes cost basis.
• Sells, trades, spending: Trigger capital gains or losses using the difference between proceeds and cost basis.
• Income events: Mining, staking, airdrops, or receiving crypto as payment create ordinary income based on USD value at receipt.
• Forks: Hard fork tokens usually carry zero basis and the USD value becomes ordinary income once you control the new asset.

Cost basis and lot selection

This site calculator uses FIFO lots. Tax-return basis rules and specific-identification requirements depend on current IRS guidance and your records, so do not assume the calculator’s FIFO result is the only permitted or required result.

Reporting

Use Form 8949 and Schedule D for capital gains. The reporting location for staking, mining, or payment income depends on the facts. Review current Form 1099-DA instructions and reconcile any broker forms with your wallet and exchange records.

IRS references: Notice 2014-21, Revenue Ruling 2019-24, and draft Instructions for Form 1099-DA.

Keeping clean records

• Export CSV files from every exchange quarterly.
• Tag transfers between your own wallets to avoid double counting.
• Note network fees—they increase basis for buys and reduce proceeds for disposals.

Use the calculator to plan ahead

Enter representative records in the crypto calculator to create a preliminary 2026 estimate. Record the displayed disposal breakdown and reconcile it with complete exchange and wallet history before review by a qualified professional.