How Are Crypto Gains Taxed?

Capital gains basics

When you sell or swap crypto for more than you paid, the difference is a capital gain, which is typically taxable.

Short-term vs long-term

Many jurisdictions tax short-term gains at ordinary income rates and long-term gains at lower rates, encouraging longer holding.

Cost basis

Your cost basis is what you paid for the crypto, including fees. Gains are calculated by subtracting the basis from the sale price.

Swaps count too

Trading one cryptocurrency for another is often a taxable event, even if you never convert back to cash.

The bottom line

Keep records of every acquisition and disposal so you can calculate gains accurately and avoid surprises at tax time.