Crypto Tax Rules 2026

The IRS treats cryptocurrency as property, not currency. All transactions are taxable events.

Basic Rules

Buying crypto: not taxable. Selling for fiat: capital gain/loss. Trading crypto-to-crypto: taxable event. Using crypto to buy goods: taxable.

Reporting Requirements

Form 8949 for each transaction. Schedule D for aggregate. Form 1099-DA from exchanges (starting 2026). New broker reporting rules apply.

Staking Income

Staking rewards taxed as ordinary income when received. Fair market value at receipt. Validator operators: business income.

DeFi Transactions

Liquidity pool: potentially taxable. Yield farming: income when received. Lending: interest income. Bridges: may be taxable.

NFT Taxation

Purchase: not taxable. Sale: capital gain if investment. Creation/sale: ordinary income if business. Royalties: ordinary income.

Loss Harvesting

Sell at loss to offset gains. $3,000 annual limit on net losses. Wash sale rule: may apply to crypto (2025+). Carryforward unlimited.