Crypto Tax Guides

Everything you need to understand and file your cryptocurrency taxes. Free guides covering capital gains, DeFi, staking, IRS forms, and tax strategies.

Getting Started

Cost Basis & Methods

DeFi & Protocols

IRS Forms & Filing

Tax Strategies

Blockchain Guides

Special Topics

Exchanges & Wallets

Crypto Tax Glossary

Capital Gain
Profit from selling an asset for more than you paid. Short-term (held ≤1 year) is taxed as income; long-term (>1 year) gets preferential rates (0%, 15%, 20%).
Cost Basis
The original value of an asset for tax purposes, usually the purchase price plus fees. Used to calculate gain or loss when you sell.
FIFO
First In, First Out. A cost basis method where the oldest purchased units are sold first. Default method used by the IRS.
HIFO
Highest In, First Out. Sells the most expensive units first, minimizing short-term gains. Legal with adequate record-keeping.
LIFO
Last In, First Out. Sells the most recently purchased units first. Can be beneficial depending on market conditions.
Average Cost
A cost basis method that divides total cost of all units by number held. The average price is used for every disposal. Available in some jurisdictions and now supported on all plans.
ACB (Adjusted Cost Base)
The Canadian method for tracking cost basis. All disposals use the weighted-average ACB. Required for Canadian tax filers — no FIFO/LIFO alternatives.
FBAR (FinCEN 114)
Report of Foreign Bank and Financial Accounts. Required if aggregate value of foreign financial accounts (including crypto on non-US exchanges) exceeds $10,000 at any point during the year.
FATCA (Form 8938)
Foreign Account Tax Compliance Act reporting. Required for specified foreign financial assets above $50,000 (single) or $100,000 (married filing jointly) on the last day of the tax year.
Perpetual Futures
Leveraged derivative contracts with no expiry date. Tax treatment varies — gains/losses are typically capital gains. Funding rate payments may be treated as interest income.
Taxable Event
Any transaction that triggers a tax obligation: selling, trading, spending crypto, or receiving it as income (staking, mining, airdrops).
Wash Sale
Selling at a loss and rebuying within 30 days. Currently not explicitly banned for crypto (unlike stocks), but proposed legislation may change this.
Tax-Loss Harvesting
Strategically selling assets at a loss to offset capital gains, reducing your overall tax bill. The $3,000 excess loss deduction applies.
Form 8949
IRS form for reporting sales and dispositions of capital assets, including cryptocurrency. Lists each transaction with dates, proceeds, and gain/loss.
Schedule D
IRS form that summarizes total capital gains and losses from Form 8949. Attached to your Form 1040.
Form 1099-DA
New IRS form (starting 2026 tax year) that brokers and exchanges must issue to report digital asset transactions.
Filing Package
A single merged PDF from Blockchain Smart Tax containing your Cover Page summary, complete Form 8949, and Schedule D — everything needed to file your crypto taxes.
Staking Rewards
Crypto earned by validating transactions on proof-of-stake blockchains. Taxed as ordinary income at fair market value when received.
Airdrop
Free tokens distributed to wallet holders. Taxed as ordinary income at fair market value when you gain dominion and control.
Impermanent Loss
Loss in value from providing liquidity to an AMM pool compared to just holding. Tax treatment is complex — realized when you withdraw liquidity.
Per-Wallet Cost Basis
IRS Rev. Proc. 2024-28 requirement (effective Jan 2025) to track cost basis separately by wallet/account rather than universally.
DeFi
Decentralized Finance — financial services built on blockchain (lending, borrowing, trading, liquidity provision). Each interaction may be a taxable event.

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