Phase 8 · Digital Assets
Crypto Capital Gains Tax Calculator
Selling crypto a day too early can cost you thousands. Estimate the tax on your gain — short-term versus long-term — and see exactly what crossing the one-year mark saves.
How is crypto taxed when you sell?
The IRS treats crypto as property, so selling, swapping or spending it is a taxable event and you owe tax on proceeds minus your cost basis. Held one year or less, the gain is short-term and taxed at ordinary income rates (10%–37%). Held more than one year, it is long-term and taxed at 0%, 15% or 20%.
- Buying and holding is not taxable — the tax triggers on disposal, and swapping one coin for another counts as a disposal.
- For a single filer in 2026, the long-term rate is 0% on income up to $49,450, 15% up to $545,500, and 20% above that.
- The holding period runs from the day after you acquire the asset to the day you sell; more than one year qualifies as long-term.
- Capital losses offset gains dollar-for-dollar, and up to $3,000 of net loss is deductible against ordinary income per year, with the rest carried forward.
Under the hood
The math, fully exposed
We stack the gain on top of your income to find both the ordinary and long-term outcome (single filer, 2026 brackets):
Capital gain = proceeds − cost basis
Short-term tax = extra federal tax when the gain is added to income (ordinary rates)
Long-term tax = gain taxed at 0% / 15% / 20%, stacked above your income
State tax = gain × your state rate (applies to both)
Saving = short-term tax − long-term tax
- Stacking matters: the long-term rate depends on your total income including the gain — a large gain can push part of itself from the 15% into the 20% band.
- The 0% bracket is real: with low enough taxable income, long-term gains can be taxed at 0% federally. Timing a sale into a low-income year is a legitimate strategy.
- Estimate only: single filer assumed, the 3.8% Net Investment Income Tax on high incomes isn't included, and every state differs. Use it to size the decision, then confirm with a tax pro.
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Answers
Frequently asked questions
How is cryptocurrency taxed?
In the US the IRS treats crypto as property, not currency. Every disposal — selling for cash, swapping one coin for another, or spending it — is a taxable event. You owe tax on the gain (proceeds minus your cost basis). Simply holding or buying crypto isn't taxable; the tax triggers when you dispose of it.
What is the difference between short-term and long-term crypto gains?
If you hold for one year or less, the gain is short-term and taxed at your ordinary income rate (10%–37%). Hold for more than one year and it's long-term, taxed at the preferential 0%, 15% or 20% rate depending on your income. The difference is often the single biggest lever on your crypto tax bill.
How long do I have to hold to get the lower tax rate?
More than one year — measured from the day after you acquired the asset to the day you sell. Crossing that one-year line moves the gain from ordinary rates to the long-term capital-gains rates, which for many people cuts the rate roughly in half. This calculator shows exactly what waiting is worth in your case.
Can I deduct crypto losses?
Yes. Capital losses offset capital gains dollar-for-dollar, and if losses exceed gains you can deduct up to $3,000 against ordinary income per year, carrying the rest forward. "Tax-loss harvesting" — realizing losses to offset gains — is a common year-end strategy. (Crypto has historically been outside the wash-sale rule, though that may change.)