📘 Crypto Tax Guide — How Cryptocurrency Is Taxed (CoinTracker)

James

— 1 min read

) Is crypto taxable?

Yes — in most countries (including the U.S.), cryptocurrency is treated like property for tax purposes. That means:

  • Selling crypto for fiat (e.g., USD) is a taxable event — profits are subject to capital gains tax.
  • Swapping one crypto for another (e.g., ETH for BTC) is also taxable.
  • Using crypto to buy goods or services triggers tax too.
  • Earning crypto (e.g., from staking, mining, airdrops) is usually taxed as ordinary income based on its fair market value when received.

📌 Not taxable events:

  • Simply buying crypto with fiat,
  • Transferring crypto between your own wallets/exchanges (no sale/disposal).

2) How capital gains tax works

Taxable gains depend on how long you held the crypto before selling/disposal:

  • Short‑term gains (held ≤ 1 year): taxed at your ordinary income tax rate.
  • Long‑term gains (held > 1 year): typically taxed at preferential capital gains rates.
    These principles apply in the U.S. and many other countries too (but specific local rates vary).

3) New reporting rules beginning 2026

From tax year 2026 onwards, brokers and exchanges will be required to report both gross proceeds and cost basis to tax authorities for covered digital assets — but only if the asset was acquired and kept on the same platform.

  • Form 1099‑DA (for U.S. taxpayers) reports gross proceeds from crypto sales.
  • Starting 2026, cost basis (what you paid originally) must also be reported for covered assets, making reconciliation easier.

Off‑exchange activity like DeFi trades, self‑custody wallets, or peer‑to‑peer swaps won’t automatically show up on official tax forms — you still must track and report those yourself.

4) Required tax forms (U.S. context)

Even with new reporting:

  • Form 8949 — reports all disposals (sales, trades).
  • Schedule D — summarizes total gains and losses.
  • Schedule 1 (or Schedule C in business cases) — reports ordinary income from crypto earnings (staking, mining, etc.).

5) Why tools like CoinTracker help

CoinTracker automatically:

  • Aggregates data from wallets/exchanges,
  • Computes cost basis & gains/losses,
  • Generates tax‑ready reports (like IRS Form 8949),
  • Helps reconcile missing info from official broker reports.

This makes it easier to comply with tax requirements and avoid mistakes.

If you want a direct link to the full official CoinTracker Crypto Tax Guide page (so you can read the whole thing step‑by‑step), here it is:

👉 Full CoinTracker Crypto Tax Guide: https://www.cointracker.io/blog/crypto-tax-guide

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