Crypto Tax Guide 2026: What You Need to Know

Cryptocurrency transactions are taxable in most jurisdictions. Understanding your obligations prevents costly surprises.

Taxable Events

In the US and most countries, these trigger tax: - Selling crypto for fiat (e.g., BTC → USD) - Trading crypto for crypto (e.g., BTC → ETH) - Using crypto for purchases - Receiving crypto as income (mining, staking, airdrops)

Non-taxable: buying crypto with fiat, transferring between your own wallets, gifting (below thresholds).

Capital Gains vs Income

• Capital gains: Profits from selling or trading. Short-term (held <1 year) taxed as ordinary income. Long-term (>1 year) taxed at lower rates (0-20% in US)
• Ordinary income: Mining rewards, staking rewards, airdrops, payment for services

Record Keeping

Track every transaction: date, amount, cost basis, sale price, fees. Use crypto tax software (Koinly, CoinTracker, TaxBit) to automate. Export transaction history from exchanges and Ledger Live.

DeFi Complications

Swaps, liquidity provision, yield farming, and NFT sales all create taxable events. Each interaction must be tracked. LP tokens, wrapped assets, and bridge transactions add complexity.

Strategies

• Hold >1 year for long-term capital gains rates
• Tax-loss harvesting: Sell losing positions to offset gains
• Keep records from day one: Retroactive tracking is painful
• Consult a professional: Crypto tax is complex; an accountant familiar with digital assets saves money and stress