Crypto Taxes in the US: The Complete 2026 Guide (Form 1099-DA, Form 8949 and More)

October 29, 2026 Mbatia Muitungu

Last updated: October 28, 2026. Covers the 2026 tax year (returns due April 15, 2027), with notes for anyone still finishing a 2025 return.

Not tax advice: This guide is general education based on IRS guidance and published law as of the date above. It is not tax, legal or financial advice, and it can’t account for your specific situation. Tax rules change, and some crypto questions are still unsettled. For decisions that matter, talk to a CPA, enrolled agent or tax attorney.

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If you bought, sold, traded, staked or got paid in crypto this year, the IRS wants to hear about it. And starting with 2025 transactions, US crypto exchanges began sending the IRS a brand-new form, Form 1099-DA, so the government now sees much more of your activity than it did a few years ago.

This guide explains, in plain English, how crypto is taxed in the United States: what counts as a taxable event, how capital gains are calculated, which forms you’ll file, what changes with Form 1099-DA, how staking and mining income works, and how to keep records that will hold up if the IRS ever asks.

Key takeaways

The IRS treats crypto as property, not currency. Selling it, trading it for another coin or spending it can trigger a capital gain or loss.
Simply buying crypto with dollars and holding it is not taxable. Neither is moving coins between wallets you own.
Crypto you earn (staking rewards, mining, airdrops, pay for work) is ordinary income at its fair market value when you receive it.
Hold more than one year before selling and the gain is long-term, taxed at 0%, 15% or 20%. One year or less is short-term, taxed like wages.
Exchanges report gross proceeds on Form 1099-DA for 2025 sales, and for 2026 sales they also report cost basis on assets you bought on the platform in 2026 or later.
You report sales on Form 8949 and Schedule D, and every Form 1040 filer must answer the digital asset question.

How the IRS treats crypto

Since Notice 2014-21, the IRS has treated cryptocurrency as property for federal tax purposes. The tax code now uses the broader term digital asset: any digital representation of value recorded on a cryptographically secured distributed ledger (a blockchain) or similar technology. That covers Bitcoin, Ether and other coins, stablecoins and NFTs.

Because crypto is property, the same basic rules that apply to stocks or real estate apply to it. When you dispose of it, you compare what you got for it with what you paid (your basis), and the difference is a capital gain or loss. When you receive it as payment or as a reward, it’s income.

What counts as a taxable event

Taxable: you may owe capital gains tax

Selling crypto for US dollars or any other government currency.
Trading one crypto for another, for example swapping ETH for SOL, or BTC for a stablecoin. Each swap is a sale of the coin you gave up. (The IRS has said like-kind exchange treatment under Section 1031 does not apply to these trades.)
Spending crypto on goods or services, even a cup of coffee.
Paying a transaction or network fee with crypto. The IRS counts this as a disposition.

Taxable: ordinary income

Staking rewards and mining rewards.
Airdrops and new coins received after a hard fork.
Crypto received as pay for a job, freelance work or selling goods.
Rewards, bonuses and interest-style payouts from platforms.

Generally not taxable

Buying crypto with dollars and holding it.
Transferring crypto between your own wallets or accounts, even if an exchange sends you a form about it. (Paying the network fee in crypto is still a small disposition.)
Receiving crypto as a genuine gift. You inherit the giver’s basis and holding period, and you only have a taxable event when you later sell. Givers can give up to $19,000 per person in 2026 without filing a gift tax return.
Donating crypto to a qualified charity. You don’t recognize a gain, and if you held it over a year you can generally deduct its fair market value. Gifts valued over $5,000 need a qualified appraisal.
A soft fork, or a hard fork where you didn’t receive any new coins.

How to calculate your gain or loss

The basic formula is simple:

Gain or loss = what you received (in US dollars) − your cost basis

Your cost basis is what you paid for the coins, including fees and commissions. For crypto you received as income, your basis is the fair market value you reported as income when you got it.

Example: You buy 0.5 BTC for $20,000 plus a $100 fee, so your basis is $20,100. Eighteen months later you sell it for $30,000 and pay a $150 fee, so you receive $29,850. Your long-term capital gain is $29,850 − $20,100 = $9,750.

Which coins did you sell? FIFO vs. specific identification

If you bought the same coin at different prices, which units you “sold” changes your gain. The IRS lets you specifically identify the units you sell if your records show when you bought them and what you paid. If you don’t, the default is first in, first out (FIFO), which often means selling your cheapest, oldest coins first.

Two rule changes matter here:

Wallet-by-wallet tracking. From January 1, 2025, basis has to be tracked separately for each wallet or account, not across your whole portfolio. Revenue Procedure 2024-28 gave a one-time safe harbor to allocate unused basis to your holdings as of that date.
Choosing lots at an exchange. For crypto held at a broker, IRS Notice 2025-07 (extended through December 31, 2026 by Notice 2026-20) lets you identify which units you sold in your own records, or with a standing order, rather than only through the broker. Coins in your own self-custody wallet aren’t covered by that relief.

Short-term vs. long-term capital gains

Your holding period starts the day after you acquire the crypto and ends on the day you dispose of it.

Short-term (held one year or less): taxed at your ordinary income tax rate, from 10% to 37%.
Long-term (held more than one year): taxed at the lower 0%, 15% or 20% rates, depending on your taxable income.

2026 long-term capital gains rates

Filing status	0% rate if taxable income is up to	15% rate up to	20% rate above
Single	$49,450	$545,500	$545,500
Married filing jointly	$98,900	$613,700	$613,700
Head of household	$66,200	$579,600	$579,600
Married filing separately	$49,450	$306,850	$306,850

Source: IRS Revenue Procedure 2025-32 (tax year 2026). For 2025 returns, the 0% band ends at $48,350 single / $96,700 married filing jointly / $64,750 head of household (IRS Topic 409).

Two extras to know about. Higher earners may owe the 3.8% Net Investment Income Tax on top, once modified adjusted gross income passes $200,000 (single) or $250,000 (married filing jointly). And the IRS has said some NFTs can be treated as collectibles (Notice 2023-27), which carry a maximum long-term rate of 28%.

Form 1099-DA: what’s new and what it means for you

Form 1099-DA, “Digital Asset Proceeds From Broker Transactions,” is the crypto version of the 1099-B you get from a stock brokerage. It came from the 2021 Infrastructure Investment and Jobs Act, and the IRS is phasing it in:

2025 transactions (forms sent in early 2026): brokers report gross proceeds only, meaning what you sold for, not what you paid.
2026 transactions (forms sent in early 2027): brokers also report cost basis, but only for “covered” assets: crypto you acquired on or after January 1, 2026 in that same account and kept there until you sold it. Coins bought earlier, or transferred in from another wallet or exchange, are generally “noncovered,” so the form may show no basis for them.

Who sends it? Custodial platforms that hold your crypto for you, such as centralized exchanges, some hosted wallets, crypto ATMs and certain payment processors. Decentralized, non-custodial platforms don’t: Congress repealed the IRS’s DeFi broker rule in April 2025. That doesn’t make DeFi trades tax-free. You still have to report them yourself.

Why a 1099-DA can make your tax bill look too high

If your 1099-DA shows proceeds but no basis, the IRS computer sees a sale with no cost behind it. If you don’t report your basis on Form 8949, it can look as if your whole sale price was profit. This is the single most important reason to keep your own purchase records, especially for coins you bought before 2026 or moved between platforms.

Also note: transactions like staking, lending, wrapping and liquidity-pool activity are temporarily excluded from 1099-DA reporting (Notice 2024-57). No form doesn’t mean no tax.

How to report crypto on your tax return

Step 1: Answer the digital asset question on Form 1040

Near the top of Form 1040, every filer must check Yes or No to this question: “At any time during the tax year, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

Answer No if you only held crypto, only bought it with dollars, or only moved it between your own wallets (with no fee paid in crypto).
Answer Yes if you sold, traded or spent crypto, paid a fee in crypto, or received crypto as income, staking or mining rewards, or airdrops.

Step 2: List each sale on Form 8949

Form 8949 is where each sale or trade goes: what you sold, when you got it, when you sold it, proceeds, basis and gain or loss. Starting with the 2025 form, the IRS added separate checkboxes just for digital assets, and you should no longer use boxes C or F for crypto:

Situation	Short-term (Part I)	Long-term (Part II)
1099-DA shows basis was reported to the IRS	Box G	Box J
1099-DA received, basis not reported to the IRS	Box H	Box K
No 1099-DA or 1099-B received (e.g., DeFi, self-custody)	Box I	Box L

Source: IRS Instructions for Form 8949 (2025). Your 1099-DA includes a code telling you which box to use. Check the final 2026 instructions when they’re released.

Step 3: Total it up on Schedule D

Schedule D summarizes your short-term and long-term totals from Form 8949 (plus any stock sales), applies loss limits and carryovers, and feeds the result into Form 1040. If your 1099-DA reports basis and you don’t need any adjustments, the instructions allow you to report those totals directly on Schedule D.

Step 4: Report crypto income in the right place

Staking, airdrops, forks and hobby mining: Schedule 1 (Form 1040), as other income.
Mining or freelancing as a business: Schedule C, plus Schedule SE for self-employment tax.
Wages paid in crypto: these should appear on your W-2 like regular pay.

Staking, mining and airdrops

Staking rewards are taxable as ordinary income at their fair market value when you gain “dominion and control,” meaning when you can sell, exchange or transfer them. That’s the IRS position in Revenue Ruling 2023-14, and in June 2026 the US Tax Court agreed in Paschall v. Commissioner (T.C. Memo. 2026-46). The court held that Cardano staking rewards credited to an exchange account were income when received, even though the taxpayer couldn’t move them to an outside wallet, because he could sell them at any time.

Mining rewards follow the same rule: income at fair market value when received. If you mine as a business, report it on Schedule C. You can then deduct ordinary business expenses like equipment and electricity, but you’ll also owe self-employment tax.

Airdrops and new coins from a hard fork are income when they land in a wallet you control (Revenue Ruling 2019-24).

Here’s the part people miss: whatever value you report as income becomes your cost basis in those coins. When you later sell them, you only pay capital gains tax on the change in value since you received them. If you don’t track that, you could pay tax twice on the same money.

Crypto losses and tax-loss harvesting

Losses can save you real money. Capital losses first offset capital gains. If losses exceed gains, you can deduct up to $3,000 a year against other income ($1,500 if married filing separately), and carry any remaining loss forward to future years with no expiration.

Tax-loss harvesting means selling an investment that’s down to lock in the loss before year-end. With stocks, the wash sale rule blocks the loss if you buy the same security back within 30 days. That rule applies to “stock or securities,” and as of this writing Congress has not extended it to crypto. The Digital Asset Tax Certainty Act (H.R. 10357), approved by the House Ways and Means Committee in September 2026, and a Senate bill introduced in October 2026 would both apply wash sale rules to digital assets, but neither is law yet.

Two cautions. First, that could change quickly, so check the rules before you harvest. Second, a sale and immediate buyback that exists only to create a paper loss could still be challenged under general tax doctrines like economic substance. A tax professional can help you weigh that risk.

Lost, stolen or worthless crypto is trickier. The IRS has said that a coin falling in value isn’t a deductible loss while you still hold it and it still trades (Chief Counsel Advice 202302011). Selling it, even for a tiny amount, is the clearest way to realize the loss. Theft and scam losses are complicated, so get professional advice.

Record-keeping: what to save and for how long

The IRS requires records sufficient to support everything on your return. For crypto, that means for every transaction:

The type of asset and the number of units.
The date and time you acquired it and disposed of it.
The fair market value in US dollars at each of those moments.
What you paid (basis), including fees, and what you received.
Which wallet or account it was in, and records of transfers between your own wallets.

Practical tips:

Download your full transaction history from every exchange at least once a year, as a CSV. Exchanges shut down, change hands or delete old data.
Label your wallet addresses so you can prove a transfer was to yourself and not a sale.
Keep records for as long as you hold the coins, plus at least three years after you file the return reporting the sale. The IRS can generally go back three years, six if income was substantially understated, and there’s no limit for unfiled or fraudulent returns.

Crypto tax software

If you have more than a handful of trades, or you use DeFi, several wallets or more than one exchange, crypto tax software can save you hours. These tools import your exchange and wallet history, match transfers between your own accounts, calculate gains and losses by lot, and produce a completed Form 8949 that you can hand to your tax preparer or import into consumer tax software.

CoinLedger: built for US filers, with exports to popular tax-filing software.
Koinly: supports a wide range of exchanges, wallets and blockchains, and works in several countries.
Many exchanges, including Coinbase and Kraken, also offer their own gain/loss reports for activity on their platform.

Whatever you use, check the results. Software is only as good as the data you give it, and the most common errors are missing transfers that show up as sales, and coins with no cost basis.

Key dates for the 2026 tax year

December 31, 2026: last day to sell for a gain or loss that counts in 2026. It’s also the day the Notice 2026-20 lot-identification relief ends, unless the IRS extends it again.
Early 2027: exchanges send Form 1099-DA for 2026 transactions, now with cost basis for covered assets.
April 15, 2027: deadline to file your 2026 return and pay any tax owed. Form 4868 extends the filing deadline to October 15, 2027, but not the payment deadline.
Quarterly: if you have large crypto gains or income with no withholding, you may need to make estimated tax payments to avoid penalties.

Still working on a 2025 return? The same rules apply. Your 2025 Form 1099-DA shows gross proceeds only, so you’ll need to supply the cost basis yourself on Form 8949 (boxes H or K). If you missed the deadline, file as soon as you can, since interest and penalties keep growing. If you didn’t report crypto in an earlier year, consider filing an amended return with Form 1040-X.

Frequently asked questions

Do I have to pay taxes on crypto if I didn’t sell?

Not on price increases. Gains are only taxed when you dispose of the crypto. But crypto you received during the year, like staking rewards, mining rewards or airdrops, is income even if you never sold it.

Is trading one crypto for another taxable?

Yes. Swapping one coin for another, including for a stablecoin, is treated as selling the first coin at its fair market value. Like-kind exchange rules don’t apply.

Do I have to report crypto if I lost money?

Yes, and you’ll usually want to. Losses offset gains and up to $3,000 of other income a year, and the rest carries forward. The IRS also says you must report digital asset transactions whether or not they produce a gain.

Do I have to report crypto if I didn’t get a 1099-DA?

Yes. You must report all taxable crypto transactions whether or not you receive a tax form. That includes trades on DeFi platforms and in self-custody wallets, which don’t issue 1099-DAs. Use box I or L on Form 8949.

What if my 1099-DA shows no cost basis?

Report the sale on Form 8949 with the correct basis from your own records (box H or K). Without it, you could end up paying tax on the full sale price.

Is moving crypto from an exchange to my hardware wallet taxable?

No. Transfers between accounts and wallets you own aren’t taxable. Keep records showing both ends belong to you. A network fee paid in crypto counts as a small disposition, though.

Are staking rewards taxed when I receive them or when I sell?

Both, in different ways. They’re ordinary income when you gain control of them (Revenue Ruling 2023-14, and the Tax Court’s 2026 Paschall decision). Then, when you sell, any change in value since you received them is a capital gain or loss.

Does the wash sale rule apply to crypto?

Not under current law, as of October 2026. The wash sale rule covers stock and securities. Bills in Congress would extend it to digital assets, so check for changes before relying on this.

What happens if I don’t report my crypto?

With exchanges now filing 1099-DAs, the IRS can match what brokers report against your return. Unreported income can lead to a bill for the tax plus interest and penalties, and in serious cases criminal charges. If you missed crypto in a past year, an amended return is usually the cleanest fix. Talk to a tax professional first.

Do I owe state tax on crypto too?

Most states with an income tax also tax crypto gains and income, usually following the federal treatment. A few states have no individual income tax. Check your state’s tax agency.

Official sources

This article is for general information only and is not tax, legal or investment advice. Digital Currency Pulse is not a tax preparer. Rules, rates and thresholds can change; verify current IRS guidance or consult a qualified tax professional before acting.