Crypto Tax Guide: How to Report Cryptocurrency

Crypto is taxed. In the United States the IRS classifies cryptocurrency as property, which means almost every disposal — a sale, a swap, a purchase of coffee with Bitcoin — is a taxable event. You report each one on Form 8949, which summarizes onto Schedule D. Hold longer than a year and you qualify for long-term capital gains rates of 0%, 15%, or 20%. Earn crypto through staking, mining, airdrops, or a paycheck and it is ordinary income at fair market value the moment you receive it.

The mechanics are the same everywhere crypto is taxed: identify the cost basis (what you paid), the proceeds (what you got), and the holding period (how long you held it). The difference between jurisdictions is mostly rate and form — covered in the jurisdiction table below.

The single biggest mistake new crypto holders make is assuming only cashing-out to a bank is taxable. It is not. The table below is the practical reference you will return to every tax season.

Rules differ country by country but converge on the same idea: crypto is an asset, disposals are taxable, and income-type events are ordinary income. Below is the 2026 landscape for the five jurisdictions that drive most English-language search traffic on crypto tax.

The gain or loss on every disposal is simply proceeds − cost basis. The complexity is bookkeeping — tracking which specific units you disposed of.

1

Establish your cost basis

Your cost basis is the purchase price plus allowable fees (exchange fees, network gas paid by you). If you bought 1 ETH at $2,000 and paid a $10 fee, your basis is $2,010.

2

Pick a lot-ID method (US)

In the US you default to First-In-First-Out (FIFO) unless you specifically identify lots at the time of sale. Specific Identification (Spec ID) and Highest-In-First-Out (HIFO) can legally lower your bill by selling your highest-basis coins first — but you must document the selection before the trade settles.

3

Determine the holding period

The clock starts the day after acquisition and ends the day you dispose of the asset. Over 365 days = long-term rates. Under = short-term / ordinary.

4

Subtract allowable costs

Exchange withdrawal fees, transfer gas paid by you, and acquisition costs are deductible against proceeds. Do not deduct network fees paid by the counterparty.

5

Net gains against losses

Short-term losses offset short-term gains, long-term losses offset long-term gains. Excess losses offset up to $3,000 of ordinary income (US) and carry forward indefinitely.

Manual spreadsheets do not scale past a few trades. The calculators below all ingest exchange CSVs and wallet addresses, match transfers, and produce jurisdiction-specific reports. Pick by use-case, not by brand.

This is the exact workflow a CPA follows. If your activity is simple (one exchange, a few trades) you can do this yourself with a calculator output.

The IRS has made crypto enforcement a flagship priority. Form 1099-DA (issued by exchanges starting tax year 2025) gives the agency a direct read on your disposals, and Chainalysis ties on-chain activity to KYC identities.

If you have unreported crypto from prior years, the IRS Voluntary Disclosure Practice can substantially reduce penalties. Talk to a tax attorney before filing amended returns.

NexCrypto imports your exchange trades and on-chain activity into a single portfolio view with per-asset cost basis, unrealized gains, and disposal history — the exact data your tax calculator needs. Stop reconciling spreadsheets at the end of the year.