In the US, capital gains tax on crypto depends on how long you held the coin. Sell after one year or less and the gain is taxed as ordinary income at 10% to 37%. Hold for more than one year and the 2026 long-term rates are 0%, 15% or 20%, depending on your taxable income. Higher earners may add the 3.8% Net Investment Income Tax, and most states tax gains too. Your gain is the sale price minus your cost basis, so the basis method you use changes the bill. Below are the 2026 IRS thresholds and three worked examples.
Key takeaways
- Selling, swapping one coin for another and spending crypto are all taxable disposals; buying and holding is not.
- For 2026, single filers pay 0% on long-term gains while total taxable income stays at or below $49,450 (married filing jointly: $98,900).
- The 3.8% NIIT applies above $200,000 of modified AGI for single filers and $250,000 for joint filers.
- Brokers now report sales on Form 1099-DA, with cost basis for assets bought in a broker account from 2026 onward.
- Net capital losses offset gains without limit and up to $3,000 of ordinary income a year; the rest carries forward.
How capital gains tax on crypto works
The IRS treats digital assets as property, not currency. Each time you dispose of a coin, you realize a gain or loss equal to the difference between what you received (in US dollars) and your cost basis, which is what you paid including fees. Taxable disposals include:
Before any tax applies you need the gain itself, and our crypto profit calculator walkthrough shows how proceeds, cost and every fee combine into profit and ROI.
- Selling crypto for dollars
- Trading one crypto for another, including stablecoins (ETH to USDC is a sale of ETH)
- Paying for goods or services with crypto
Moving coins between wallets you own is not a sale, and neither is buying. Income-type receipts, such as staking rewards, mining income and airdrops, are taxed as ordinary income when received and then get a cost basis equal to that value; selling them later creates a separate capital gain or loss. Our broader crypto tax guide covers those income events, while this page focuses on the capital gains calculation.
The holding period starts the day after you acquire the coin. If you sell on or before the one-year anniversary, the gain is short-term. One day later, it becomes long-term.
2026 capital gains tax rates for crypto
The figures below come from IRS Revenue Procedure 2025-32, which sets the inflation-adjusted amounts for tax year 2026 (returns filed in 2027). Brackets are applied to taxable income, meaning after the standard or itemized deduction. The 2026 standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.
Putting your trading inside a company does not automatically lower these rates; our guide to forming an LLC for crypto trading explains what an LLC does and does not change.
Long-term rates (held more than one year)
| Filing status | 0% rate if taxable income 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 |
Short-term rates (held one year or less)
Short-term gains are added to wages and other ordinary income and taxed at your marginal rate:
| Rate | Single: taxable income over | Married filing jointly: over |
|---|---|---|
| 10% | $0 | $0 |
| 12% | $12,400 | $24,800 |
| 22% | $50,400 | $100,800 |
| 24% | $105,700 | $211,400 |
| 32% | $201,775 | $403,550 |
| 35% | $256,225 | $512,450 |
| 37% | $640,600 | $768,700 |
The 3.8% Net Investment Income Tax
On top of the rates above, the NIIT adds 3.8% on the smaller of your net investment income (which includes crypto gains) or the amount by which your modified adjusted gross income exceeds $200,000 (single or head of household), $250,000 (married filing jointly) or $125,000 (married filing separately). These thresholds are set in the statute and are not indexed for inflation, so more people cross them each year. The top federal rate on long-term crypto gains is therefore 23.8%, and on short-term gains 40.8%.
State taxes on top
Most states with an income tax treat capital gains as regular income, with no separate long-term discount. California, for example, taxes all gains at its ordinary rates, which our California crypto tax page breaks down. A handful of states, such as Florida, Texas and Nevada, have no personal income tax. Check your state revenue department’s current rules, since a few states have their own capital gains provisions.
How much is capital gains tax on crypto? Three worked examples
These examples use 2026 federal figures only and assume no other gains or losses. They are illustrations, not tax advice.
If you want to estimate a full year rather than single trades, the step-by-step crypto tax estimate nets short-term and long-term results before applying your rate.
Example 1: A short-term trade
Maya, a single filer, has $60,000 of taxable income from her salary. In March 2026 she buys ETH for $3,000 and sells it in August for $8,000, a $5,000 short-term gain. Her taxable income rises to $65,000, all within the 22% bracket ($50,400 to $105,700). Federal tax on the gain: $5,000 × 22% = $1,100.
Example 2: A long-term gain that straddles the 0% bracket
Daniel, single, has $40,000 of ordinary taxable income. He sells bitcoin he bought in 2023, realizing a $20,000 long-term gain, bringing taxable income to $60,000. Long-term gains stack on top of ordinary income, so the first $9,450 of the gain fills the 0% band up to $49,450, and the remaining $10,550 is taxed at 15%. Federal tax: $0 + $1,582.50 = $1,582.50, an effective rate of about 7.9% on the gain.
Example 3: A large long-term gain with NIIT
A married couple filing jointly has $300,000 of ordinary taxable income and realizes a $100,000 long-term gain on SOL held since 2024. Total taxable income is $400,000, under the $613,700 ceiling, so the whole gain falls in the 15% band: $15,000. Their modified AGI is well above $250,000, and the excess exceeds the $100,000 of investment income, so the NIIT applies to the full gain: $3,800. Federal total: $18,800, or 18.8% of the gain, before any state tax.
Cost basis methods: FIFO, HIFO and specific identification
If you bought the same coin at different prices, which units you “sold” determines the gain. US rules allow:
NFT trades follow the same property rules with a few differences, which our guide to how NFT sales and mints are taxed explains.
| Method | How it works | Typical effect |
|---|---|---|
| FIFO (first in, first out) | Oldest units are treated as sold first | In a rising market, often a larger gain but more likely long-term |
| Specific identification | You choose which units are sold, with adequate records | Lets you target a desired gain, loss or holding period |
| HIFO (highest in, first out) | A form of specific identification picking the costliest units first | Usually minimizes the current gain; can turn long-term lots into short-term |
Two rules changed how this works from 2025 onward:
- Basis is tracked wallet by wallet. You can no longer pool all your coins across exchanges and wallets into one universal basis pile. Units sold from Coinbase must come from lots held in that Coinbase account. The IRS’s Rev. Proc. 2024-28 gave a safe harbor for allocating unused basis to each wallet as of January 1, 2025.
- Specific identification at a broker must be made by the time of the sale, usually through a standing instruction or the broker’s lot-selection setting. If you do not identify lots, the broker defaults to FIFO within that account.
Average cost, common in some other countries, is not an allowed method for US crypto. Whatever you choose, apply it consistently and keep records of each lot’s date, amount and cost.
Form 1099-DA and reporting your gains
Custodial brokers such as US exchanges now issue Form 1099-DA. For 2025 transactions, the form reported gross proceeds. Starting with sales in 2026, brokers must also report cost basis for “covered” digital assets, meaning coins acquired in that same account on or after January 1, 2026 and held there until sale. Coins you bought earlier, or transferred in from another wallet, are generally “noncovered,” so the basis box may be blank and the burden of proof is yours.
For a box-by-box explanation of the new broker form and its phase-in dates, read our Form 1099-DA guide.
Every disposal goes on Form 8949, which feeds totals into Schedule D of Form 1040. You also answer the digital asset question on the front of Form 1040. Where your 1099-DA shows no basis or the wrong basis, report the correct figure on Form 8949 and keep the records that support it. Reconciling dozens of trades by hand is tedious, which is why many people use one of the tools in our crypto tax software comparison to import transactions and generate Form 8949.
Using losses to reduce capital gains tax
Capital losses first offset gains of the same type (short-term against short-term, long-term against long-term), then each other. If losses exceed gains for the year, up to $3,000 of the net loss ($1,500 if married filing separately) can reduce ordinary income, and anything left over carries forward to future years indefinitely.
For example, if you realize $2,000 of gains and $10,000 of losses in 2026, the net loss is $8,000. You deduct $3,000 against your salary in 2026 and carry $5,000 forward to 2027.
Currently, the wash sale rule that blocks this for stocks does not apply to crypto, so selling at a loss and buying back soon after is allowed under existing law. However, Congress has been considering bills to extend the wash sale rule to digital assets; a House Ways and Means bill advanced in September 2026 would, if enacted, apply to crypto sold after a proposed date in mid-September 2026. As of late October 2026 it had not become law. Check the current status before relying on loss harvesting, and see our crypto tax-loss harvesting guide for the mechanics. For more beginner walkthroughs, browse our Bitcoin guides.
FAQ
How much is capital gains tax on crypto if I sell within a year?
Crypto held one year or less is taxed as ordinary income at your marginal federal rate, which ranges from 10% to 37% in 2026, plus the 3.8% NIIT if your modified AGI exceeds $200,000 (single) or $250,000 (joint). State income tax is usually added on top. A single filer with $60,000 of taxable income, for instance, pays 22% federal on additional short-term gains.
Do I pay capital gains tax on crypto if I don’t cash out to dollars?
Yes, if you swap or spend it. Trading BTC for ETH, or ETH for a stablecoin, is treated as selling the first coin at its fair market value, so a gain or loss is realized even though no dollars hit your bank. Simply holding, or moving coins between your own wallets, is not taxable. Track the dollar value at the moment of each swap.
Is there a tax-free amount for crypto capital gains?
There is no crypto-specific exemption or de minimis allowance under current law; even small purchases with crypto are technically taxable. However, long-term gains fall in the 0% bracket while your total 2026 taxable income stays at or below $49,450 (single) or $98,900 (married filing jointly). Proposals for a small-transaction exemption have been debated in Congress but were not law as of October 2026.
What if my 1099-DA shows the wrong cost basis?
The 1099-DA is a starting point, not the final word. If basis is missing (common for coins transferred in or bought before 2026) or wrong, report the correct figures on Form 8949 using the appropriate adjustment and keep records such as purchase confirmations and wallet histories. Rules change and the IRS updates its instructions yearly, so check the current Form 8949 instructions or ask a tax professional.
Crypto is volatile and risky; this is education, not financial advice. Do your own research.
