Do I owe tax on crypto if I never cashed out to dollars?

Often yes. Selling crypto for dollars is only one taxable event. Trading one coin for another, spending crypto on goods or services, and receiving staking, mining, airdrop, or interest rewards are all taxable in the year they happen — even if no dollars ever hit your bank account.

How is crypto taxed in the United States?

The IRS treats digital assets as property. Disposing of crypto creates a capital gain or loss (short-term if held one year or less, long-term if held more than a year). Crypto received as income — staking, mining, rewards, or payment for work — is taxed as ordinary income at its fair market value on the day you received it.

What forms report crypto on my tax return?

Capital gains and losses go on Form 8949 and flow to Schedule D. Crypto income is reported on Schedule 1, Schedule C (if it is a business), or as wages. Every Form 1040 also asks a yes/no digital asset question that must be answered truthfully.

Does the IRS know about my crypto?

Increasingly yes. Custodial brokers now issue Form 1099-DA for digital asset dispositions, exchanges report under John Doe summonses and information-sharing agreements, and on-chain analytics tie wallets to KYC accounts. Unreported activity is the most common trigger for the notices we resolve.

Are crypto losses deductible?

Realized capital losses offset capital gains dollar for dollar, and up to $3,000 of excess loss offsets ordinary income per year, with the rest carried forward indefinitely. Losses from theft or scams follow different, much stricter rules.

What records do I need to file crypto taxes correctly?

A complete transaction history from every exchange and wallet, cost basis for each acquisition, transfer records between your own wallets, all 1099-DA / 1099-MISC / 1099-B forms, and documentation for income events. Our reporting checklist walks through each item.

Crypto tax hub

Crypto Taxes, Explained Properly

Straight answers on how digital assets are taxed, which events create a bill, and what to gather before you file — written and reviewed by a CPA who spent years as an IRS Revenue Agent.

The IRS treats crypto as property. Disposing of it — selling, trading, or spending — creates a capital gain or loss, while crypto you earn is ordinary income at its value on the day you received it. You can owe tax without ever moving a dollar to your bank.

Estimate your crypto tax Reporting checklist

Licensed CPA Former IRS Revenue AgentUpdated June 2026

Crypto tax calculator

Estimate federal and state tax on gains, staking income, and harvested losses.

Reporting checklist

Every export, form, and basis record you need — with progress saved as you go.

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Crypto tax service

Reconciliation, basis reconstruction, and filing across every wallet and exchange.

The overview

How crypto is taxed in the United States

Capital gains and losses

Every disposal is measured against your cost basis. Held one year or less, the gain is taxed at ordinary rates up to 37%. Held longer, it falls into the 0%, 15%, or 20% long-term brackets.

Ordinary income events

Staking, mining, airdrops, interest, and crypto received as pay are income at fair market value on the day you gain control. That value becomes your basis for the eventual sale.

Reporting and matching

Disposals go on Form 8949 and Schedule D; income goes on Schedule 1 or Schedule C. With Form 1099-DA now in circulation, mismatches against exchange data are the top notice trigger.

Taxable events

Selling crypto for dollars
Trading one token for another, including stablecoins
Spending crypto on goods, services, or gift cards
Staking, lending, and liquidity rewards
Mining income and crypto paid for work
Airdrops, forks, and referral bonuses

Not taxable

Buying crypto with dollars and holding
Moving coins between wallets you own
Withdrawing dollars you already reported
Unrealized gains on coins you still hold
Gifts within the annual exclusion
Donations to a qualified charity

Guides

The questions we get asked most

How to report crypto

How to Report Crypto on Your Taxes

Report every crypto disposal on Form 8949, total it on Schedule D, and report crypto received as income on Schedule 1 or Schedule C at its fair market value on the day you received it. Answer the digital asset question on page 1 of Form 1040 yes if you sold, traded, spent, or earned crypto during the year.

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Taxes before withdrawal?

Do You Pay Crypto Taxes Before Withdrawing to Cash?

Yes — tax is triggered when you dispose of or earn crypto, not when you withdraw dollars to your bank. Coin-to-coin trades, spending crypto, and staking or airdrop rewards are all taxable in the year they occur. Withdrawing your own dollars from an exchange is not itself a taxable event.

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How losses are treated

Are Crypto Losses Tax Deductible?

Realized crypto capital losses are deductible: they offset capital gains dollar for dollar, then up to $3,000 per year of ordinary income ($1,500 if married filing separately), with any remainder carried forward indefinitely. Paper losses on coins you still hold are not deductible, and theft or scam losses follow separate, far narrower rules.

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FAQ

Crypto tax FAQs

Crypto taxes, handled

Talk to a CPA who has audited crypto.

Free 30-minute Consultation Call. We'll scope your wallets, exchanges, and prior years — and tell you exactly what filing correctly will cost.

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