Capital gains
Gains on coins held one year or less are short term and taxed at ordinary income rates of 10% to 37%. Gains on coins held longer than a year are long term and taxed at 0%, 15% or 20% depending on income. High earners may also owe the 3.8% net investment income tax. Losses offset gains, and up to $3,000 of net losses a year can offset ordinary income, with the rest carried forward.
What counts as a disposal
Selling for dollars, trading one coin for another, and paying for goods or services with crypto all trigger gain or loss. Buying with dollars, moving coins between your own wallets and simply holding do not.
Staking, mining and airdrops
Staking rewards, mining income and airdropped tokens are ordinary income at their fair market value when you gain control of them. That value becomes your cost basis for a later sale. Mining as a business can also trigger self employment tax.
Reporting
Every Form 1040 asks whether you received or disposed of digital assets. Disposals go on Form 8949 and Schedule D. Brokers report gross proceeds on the new Form 1099-DA for sales from 2025, adding cost basis for many sales from 2026.