The Definitive Crypto Tax Guide for 2026

Crypto is Property, Not Currency

Despite the name, the IRS treats cryptocurrency as property. This means every time you spend it, trade it, or sell it, you trigger a capital gains event. You need to calculate the difference between what you paid for it (cost basis) and what it was worth when you disposed of it.

The Wash Sale Rule Updates

Historically, crypto was exempt from the Wash Sale Rule, allowing investors to sell at a loss and immediately buy back to harvest the tax loss. As of 2026, legislation has closed this loophole. You must now wait 30 days before repurchasing a "substantially identical" asset if you want to claim the loss.