U.S. Crypto Tax Treatment of Sales, Rewards, and DeFi Activity

Summary

The guide explains how U.S. federal tax rules generally distinguish crypto disposals from crypto income. Selling, swapping, or spending an asset can realize a capital gain or loss, with the holding period determining whether short-term ordinary rates or long-term capital-gains rates apply. Mining, staking, and airdrop receipts are described as ordinary income based on fair market value when received; buying and holding or transferring between wallets one owns are presented as non-taxable events.

It also outlines record keeping and reporting through Forms 8949 and 1040, mentions the expected use of Form 1099-DA, and discusses loss offsets, gifts, donations, NFTs, state taxes, DeFi lending, and derivatives. Examples illustrate a gain calculation and a capital loss offset. The guide supplies estimated rate tables and selected thresholds, but some international and advanced-topic sections are incomplete. Tax treatment can depend on the asset and circumstances, and the document advises checking current IRS guidance or consulting a tax professional.

Key ideas

• Selling, swapping, or spending crypto may realize a capital gain or loss.
• Holding period affects whether a gain is treated as short-term or long-term.
• Mining, staking, and airdrop rewards are described as ordinary income when received.
• Transactions and cost basis should be tracked for tax reporting.
• DeFi, NFTs, state rules, and newer reporting forms can add complexity.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.