US Crypto Tax Guide for the 2025 Tax Year: Gains, Income and Form 1099-DA
In the United States, the IRS treats cryptocurrency and other digital assets as property, not currency. That means you owe tax when you sell, swap or spend crypto at a gain, and when you receive crypto as pay, mining or staking rewards or an airdrop. Buying crypto with US dollars and holding it is not taxed. For the 2025 tax year (the return you file in 2026), gains on crypto held for one year or less are taxed at your ordinary rates (10% to 37%), and gains on crypto held for more than one year are taxed at 0%, 15% or 20%.
This guide explains what counts as a taxable event, how gains and income are worked out, how cost basis works now that it is tracked wallet by wallet, what Form 1099-DA is, which forms to use, and which crypto tax bills in Congress are not law yet. It covers US federal tax only. Every figure comes from an IRS or other government page listed in the Sources section at the end. This is general information, not tax or legal advice.
If you want to see how crypto income and gains fit into your whole return, the 2025 US federal tax calculator asks a few plain questions about your income and estimates your refund or amount owed. We do not have a separate crypto calculator, so first work out your gain or income in US dollars using this guide, then use the calculator for the bigger picture.
What counts as a digital asset?
For US tax purposes, a digital asset is any digital representation of value recorded on a cryptographically secured ledger such as a blockchain. The IRS lists cryptocurrencies such as Bitcoin, stablecoins and non-fungible tokens (NFTs) as examples. The tax rules below apply to all of them.
Some NFTs may be treated as collectibles, and long-term gains on collectibles can be taxed at up to 28% instead of 20% (IRS Notice 2023-27). If you sell NFTs at a gain, check the current IRS guidance or ask a tax professional.
Which crypto transactions are taxable?
The question to ask is whether you disposed of crypto (gave it up in return for something) or received crypto as income. Here is how the common situations are treated.
| What happened | Taxable? | How it is taxed |
|---|---|---|
| Bought crypto with US dollars | No | No tax on the purchase. Record the cost, which becomes your basis. |
| Held crypto in a wallet or account | No | No tax until you dispose of it. |
| Sold crypto for US dollars | Yes | Capital gain or loss: proceeds minus basis. |
| Swapped one crypto for another | Yes | Capital gain or loss on the crypto you gave up. The IRS does not allow a like-kind exchange (Section 1031) for crypto. |
| Spent crypto on goods or services | Yes | Capital gain or loss on the crypto, measured against the value of what you received. |
| Paid a network or transfer fee in crypto | Yes | Treated as a disposal of that crypto. The amounts are usually small. |
| Moved crypto between your own wallets or accounts | No | Not a taxable event, even if an exchange sends you a form. |
| Received crypto as pay for work | Yes | Ordinary income equal to its US dollar value when received. Self-employment tax applies if you are self-employed. |
| Received mining or staking rewards | Yes | Ordinary income at the US dollar value when you gain control of the reward. |
| Received an airdrop (including after a hard fork) | Yes | Ordinary income at the US dollar value when received. |
| A hard fork gave you no new coins | No | No income. |
| Received crypto as a genuine gift | No | No income until you sell. You take over the giver's basis and holding period. |
| Gave crypto as a gift | No tax for you | A gift tax return (Form 709) is needed if the gift is above the $19,000 annual exclusion per person. |
| Donated crypto to a qualified charity | No gain | No gain or loss. The deduction is generally the fair market value if you held it for more than one year. |
How capital gains on crypto are taxed
When you dispose of crypto that you held as an investment, your gain or loss is the amount you received (in US dollars) minus your basis, which is generally what you paid, including fees. How long you held it decides the rate:
- Short-term (held one year or less): taxed as ordinary income, at your normal bracket rate from 10% to 37%.
- Long-term (held more than one year): taxed at 0%, 15% or 20%, depending on your total taxable income. The holding period starts the day after you acquired the crypto.
The long-term rate depends on where your taxable income falls. Long-term gains are stacked on top of your other income, so part of a gain can be taxed at 0% and the rest at 15%.
| Filing status | 2025: 0% up to | 2025: 15% up to | 2026: 0% up to | 2026: 15% up to |
|---|---|---|---|---|
| Single | $48,350 | $533,400 | $49,450 | $545,500 |
| Married filing jointly | $96,700 | $600,050 | $98,900 | $613,700 |
| Married filing separately | $48,350 | $300,000 | $49,450 | $306,850 |
| Head of household | $64,750 | $566,700 | $66,200 | $579,600 |
Two other points on gains:
- Net investment income tax. A 3.8% tax applies to the lesser of your net investment income or the amount your modified adjusted gross income is over $200,000 (single or head of household) or $250,000 (married filing jointly).
- Losses. Capital losses first cancel capital gains. If you still have a net loss, you can deduct up to $3,000 a year ($1,500 if married filing separately) against other income and carry the rest forward to later years.
Crypto income: mining, staking, airdrops and pay
Some crypto is taxed as income when you receive it, before you ever sell it.
- Pay for work. If an employer or client pays you in crypto, you have ordinary income equal to the US dollar value on the date and time you receive it. Employees see this in wages. Independent contractors owe self-employment tax on it.
- Mining. The value of coins you mine is gross income when you receive them. If mining is a trade or business, the net profit is also subject to self-employment tax (IRS Notice 2014-21).
- Staking. Under IRS Revenue Ruling 2023-14, rewards are income in the year you gain dominion and control over them, measured at their fair market value at that time.
- Airdrops. Under Revenue Ruling 2019-24, new coins received from an airdrop following a hard fork are ordinary income when you can transfer, sell or otherwise dispose of them.
The amount you report as income becomes your basis in those coins. When you later sell them, you report a second event: a capital gain or loss equal to the sale price minus that basis. Income from forks, staking and mining goes on Schedule 1 of Form 1040. Business income goes on Schedule C.
Cost basis: why it is now tracked wallet by wallet
Your basis is the US dollar amount you paid for a digital asset, including fees and commissions. If you received it as income, your basis is the value you reported as income. If you received it as a gift, you generally take the giver's basis and holding period.
New rule from January 1, 2025. Basis and holding period are now worked out separately for each wallet or account, not across everything you own. If you sell only some of the units of the same coin held in one wallet or account, the IRS lets you choose which units you sold in two ways:
- Specific identification. You pick the exact units sold, for example by purchase date, and keep records proving it. For coins in your own (unhosted) wallet you must identify the units no later than the date and time of the sale and keep adequate records. For coins held with a broker, you identify them to the broker.
- First in, first out (FIFO). If you do not identify specific units, the earliest units you acquired in that wallet or account are treated as sold first.
For crypto you already owned, Revenue Procedure 2024-28 allowed you to allocate your unused basis to the units remaining in each wallet or account as of January 1, 2025. Keep a record of how you did this.
Form 1099-DA: what it is and what to do with it
Form 1099-DA, Digital Asset Proceeds From Broker Transactions, is the new form that crypto brokers send you and the IRS when you dispose of digital assets. It works like the Form 1099-B you get for stocks.
- For 2025 transactions (the return you file in 2026), brokers must report your gross proceeds. They were not required to report your cost basis for 2025.
- From January 1, 2026, brokers must also report basis on certain transactions, so the 2026 forms (sent in early 2027) will show more.
- Who sends it. Mainly US brokers that hold your crypto, such as custodial exchanges and hosted wallet providers. A foreign exchange may not send you one, but you still must report those transactions. Decentralized or non-custodial brokers that never take possession of your assets are not covered by the final regulations.
- Some activities are exempt for now. Brokers do not have to report wrapping, liquidity provider transactions, staking, lending or short sales until further guidance (IRS Notice 2024-57). Rewards you earn from those activities are still taxable.
- If the form is wrong, ask the issuer for a corrected form. The IRS cannot correct it for you.
Whether or not you receive a Form 1099-DA, you must report all your crypto income, gains and losses, and you must work out your own basis before you file.
How to report crypto on your return
Follow these steps for the 2025 tax year.
| What you need to report | Where it goes |
|---|---|
| The digital assets question (received or disposed of crypto?) | Yes or No near the top of Form 1040. Answer Yes if you received crypto as pay, a reward or an airdrop, or sold, swapped, spent or gave away crypto. Answer No if you only bought with dollars, held, or moved between your own wallets. |
| Each sale, swap or spend of crypto held as an investment | Form 8949, then Schedule D. Use boxes G, H or I for short-term and J, K or L for long-term digital asset transactions. Do not use boxes C or F. |
| Mining, staking, airdrop and other crypto income | Schedule 1 (Form 1040), or Schedule C if it is a business. |
| Crypto received as an employee | Wages on Form 1040 (your W-2). |
| Gifts of crypto above the annual exclusion | Form 709. |
| Noncash charitable gifts over $500 | Form 8283. |
On Form 8949, the box depends on whether you got a Form 1099-DA and whether it reported basis to the IRS. Use box G (short-term) or J (long-term) when the form shows basis reported to the IRS. Use H or K when it shows proceeds but no basis reported. Use I or L when you did not receive a Form 1099-DA. If a broker's basis is wrong, you can correct it in the adjustment column.
Worked example: staking rewards and a long-term sale
Assumptions (tax year 2025): Sam is single. After the standard deduction, Sam's taxable income from wages is $40,000 before any crypto. Sam received staking rewards worth $1,000 (their value when received). Sam also sold one coin for $42,000 in September 2025. Sam bought it in February 2024 for $30,000, including fees, so it was held for more than one year. This ignores state tax, the net investment income tax (Sam's income is below $200,000) and any credits.
Step 1: the staking income. The $1,000 is ordinary income, so taxable income becomes $40,000 + $1,000 = $41,000. That is in the 12% bracket (from $11,925 to $48,475), so the extra tax is 12% × $1,000 = $120.
Step 2: the gain. $42,000 − $30,000 = $12,000 long-term capital gain.
Step 3: which rate applies. The 0% rate applies up to $48,350 of taxable income. Sam's other income is already $41,000, so $48,350 − $41,000 = $7,350 of the gain is taxed at 0%. The remaining $12,000 − $7,350 = $4,650 is taxed at 15%: $4,650 × 15% = $697.50.
Result: tax caused by the crypto = $120 + $697.50 = $817.50.
What if Sam had sold after 11 months instead? The same $12,000 would be short-term and taxed as ordinary income on top of $41,000. The first $7,475 (up to $48,475) is taxed at 12% = $897.00. The other $4,525 is taxed at 22% = $995.50. The tax on the gain would be $1,892.50, which is $1,195 more than $697.50.
What the broker form shows. For a 2025 sale, a Form 1099-DA would show the $42,000 proceeds. Sam would add the $30,000 basis on Form 8949.
Main limitation: a real return has other income, deductions, state tax and possibly the net investment income tax. Treat this as an illustration of the method, not an estimate for your return.
Gifts, donations and inheritances
- Receiving a gift. A genuine gift is not income. If you later sell it at a gain, your basis is the giver's basis and your holding period includes the time the giver held it. If you sell at a loss, your basis is the lower of the giver's basis or the value when you received the gift. If you cannot document the giver's basis, your basis is zero.
- Giving a gift. You do not owe income tax. If your gift to one person is more than the annual exclusion ($19,000 for 2025), the giver files Form 709.
- Donating to charity. You do not pay tax on the donation. If you held the crypto for more than one year, the deduction is generally its fair market value. If you held it for one year or less, the deduction is the lesser of your basis or the value. Keep a written acknowledgment for gifts of $250 or more. Over $5,000 generally also needs a qualified appraisal and a signed Form 8283.
- Inherited crypto. Your basis is generally the fair market value on the date of the owner's death.
Losses and the wash sale rule
A loss on crypto can offset gains, and up to $3,000 a year of any extra loss can reduce other income. Losses count only when you dispose of the crypto, so a drop in value alone does nothing for your return.
Does the wash sale rule apply to crypto? The wash sale rule in the tax code disallows a loss when you sell stock or securities at a loss and buy substantially identical ones within 30 days before or after the sale (IRS Publication 550). The IRS treats digital assets as property, and no enacted law extends the wash sale rule to them. Bills in Congress would change that (see the next section), but they are not law. Until one is enacted, ask a tax professional before you rely on selling and quickly rebuying the same coin, and keep clear records of every purchase.
Crypto tax bills in Congress: not law yet
Several articles on this site follow proposed crypto tax legislation. As of November 10, 2026, none of it is law, so none of it changes how you report 2025 income. The status of the two main bills is below.
| Bill | What it would do (summary) | Latest step | Law? |
|---|---|---|---|
| H.R. 10357, Digital Asset Tax Certainty Act (House) | Exclude gain or loss on regulated US dollar stablecoins and on network or transaction fees under $10; allow mark-to-market accounting for dealers and traders; apply the wash sale and constructive sale rules to digital assets; set tax rules for mining and staking; create a voluntary disclosure program. | Introduced September 14, 2026. House Ways and Means ordered it reported on September 16, 2026, by a vote of 38 to 5. | No |
| S. 5616, ADAPT Act (Senate) | Similar themes: no gain or loss on everyday purchases with regulated dollar stablecoins, a $10 network fee exemption, the wash sale and constructive sale rules for digital assets, and mark-to-market for dealers and traders. | Introduced September 30, 2026 and referred to the Senate Finance Committee. | No |
The Joint Committee on Taxation's description of H.R. 10357 covers the bill as introduced. The committee reported it as a substitute on September 16, 2026, so the final text may differ. To become law, a bill must pass the House and the Senate and be signed by the President. A bill that does not pass in the current Congress has to be reintroduced. Treat every feature of these bills as a proposal. Do not assume a $10 fee exemption, stablecoin relief or wash sale rules apply to your 2025 return.
IRS guidance on staking trusts. Revenue Procedure 2026-20 updates a safe harbor, first issued as Revenue Procedure 2025-31, that lets certain exchange-listed investment trusts stake digital assets without losing their trust tax status. It applies to those trusts, not to how you report your own staking rewards.
Common crypto tax mistakes
- Not reporting because no form arrived. You must report crypto transactions even if you got no Form 1099-DA, including trades on foreign platforms.
- Treating a swap as non-taxable. Trading one coin for another is a disposal. Work out the gain or loss in US dollars.
- Forgetting income on rewards. Staking, mining and airdrop rewards are taxed when received, and then again as a gain or loss when you sell.
- Mixing up wallets. Since 2025, basis is tracked by wallet or account. Moving coins between your own wallets is not taxable, but it can change which units are treated as sold.
- Using the wrong holding period. One year or less is short-term. More than one year is long-term. Count from the day after you acquired it.
- Planning on bills that are not law. Do not take a position based on a proposal.
- Skipping the digital assets question. Every Form 1040 asks it, and your answer should match what you actually did.
A simple record-keeping checklist
For each transaction, keep: the type of digital asset, the date and time, the number of units, the US dollar value at that time, and your basis. The IRS can ask you to support every figure on your return.
- Export transaction histories from every exchange and wallet before you close any account.
- Save each Form 1099-DA and any statement from your broker.
- Keep a note of how you allocated basis to each wallet or account at January 1, 2025.
- Mark rewards, airdrops and payments received separately from trades.
- Note which units you sold when you chose specific identification, at the time you sold.
- Keep receipts for gifts and charity donations, including appraisals over $5,000.
If you missed crypto income or a loss on a past return, you can usually file an amended return on Form 1040-X within 3 years of filing the original.
Frequently asked questions
More US crypto tax articles
Reporting and current rules
- Form 1099-DA: what crypto investors need to know: gross proceeds for 2025, basis from 2026.
- Crypto cost basis: the IRS wallet-by-wallet rule: FIFO and specific identification since January 1, 2025.
- How to report crypto on your 2025 tax return: Form 8949, Schedule D and Schedule 1.
- Crypto staking taxes: rewards, trusts and pending bills: Revenue Ruling 2023-14 and the trust safe harbor.
- The 0% capital gains rate and crypto: the 2025 and 2026 limits.
- Crypto tax changes: what is different for 2025 and 2026: what is in effect and what is only proposed.
- How the One Big Beautiful Bill affects crypto taxes: the standard deduction and other numbers.
- Crypto market crashes: what your losses mean for taxes: realized losses, the $3,000 limit and carryforwards.
Proposed legislation (none of it is law)
- Digital Asset Tax Certainty Act: status update for crypto taxpayers: where H.R. 10357 stands and what current law still requires.
- Digital Asset Tax Certainty Act: proposed start dates: when each proposed change would apply.
- Digital Asset Tax Certainty Act: crypto tax scenarios: how the proposed rules could change a crypto capital gain.
- Digital asset voluntary disclosure program: the proposed program for fixing past reporting errors.
- ADAPT Act (S. 5616): the Senate crypto tax bill: what it proposes.
- Stablecoin tax relief proposals: proposed stablecoin nonrecognition rules.
- De minimis exemptions for crypto: proposals to exempt small transactions.
- Crypto wash sale rules: why crypto is treated differently today and what is proposed.
- Blockchain Association's 10 crypto tax principles: an industry group's requests to Congress.
State, international and estate questions
Sources
All figures above were checked against these government pages in November 2026.
- IRS: Digital assets
- IRS: Frequently asked questions on virtual currency transactions (Part I)
- IRS: Frequently asked questions on digital asset transactions (Part II)
- IRS: Understanding your Form 1099-DA
- IRS: Final regulations and guidance for broker reporting of digital assets
- IRS: Instructions for Form 8949 (2025)
- IRS Topic no. 409, Capital gains and losses
- IRS Topic no. 559, Net investment income tax
- IRS Notice 2014-21, Virtual currency
- IRS Notice 2023-27, NFTs as collectibles
- IRS Notice 2024-57, Broker reporting exceptions
- IRS Revenue Ruling 2019-24, Hard forks and airdrops
- IRS Revenue Ruling 2023-14, Staking rewards
- IRS Revenue Procedure 2024-28, Allocating basis to wallets and accounts
- IRS Revenue Procedure 2026-20, Trust staking safe harbor
- IRS Revenue Procedure 2025-32, 2026 inflation adjustments
- IRS Publication 550, Investment income and expenses (wash sales)
- IRS Publication 551, Basis of assets
- IRS Publication 561, Determining the value of donated property
- IRS: Tax year 2026 inflation adjustments
- Congress.gov: H.R. 10357, Digital Asset Tax Certainty Act (all actions)
- House Ways and Means: H.R. 10357 one-page summary
- GovInfo: S. 5616, ADAPT Act (as introduced)
- Senator Daines: ADAPT Act summary