When do you owe tax on cryptocurrency?
In both the US and UK, selling crypto for cash, swapping one coin for another and spending it are generally taxable disposals, while buying and holding, or moving coins between your own wallets, generally are not. Income such as staking rewards can be taxed when received.
This is general information about official guidance, not tax advice. Rules differ by country and change over time. Check with a qualified tax professional for your situation.
United States (IRS)
The IRS treats digital assets as property, not currency. Practically:
- Taxable: selling for dollars, exchanging one digital asset for another, paying for goods or services with crypto, and receiving crypto as income (wages, mining, staking rewards, airdrops in many cases).
- Generally not taxable: buying with dollars and holding; transferring between wallets or accounts you own.
- Gains and losses are the difference between what you received and your basis (usually what you paid, including fees). Holding period decides short- versus long-term rates.
Every Form 1040 includes a digital asset question asking whether you received or disposed of digital assets during the year.
Form 1099-DA. Under Treasury regulations, US brokers report gross proceeds on Form 1099-DA for sales on or after 1 January 2025, and cost basis for covered assets acquired on or after 1 January 2026. Coins you move to self-custody and spend from there will not appear on a broker form, so your own records still matter.
United Kingdom (HMRC)
HMRC’s Cryptoassets Manual treats most individuals’ crypto as subject to Capital Gains Tax when disposed of:
- Disposals include selling for pounds, swapping for another cryptoasset, using it to pay for goods or services, and giving it away (gifts to a spouse or civil partner are an exception).
- Gains are calculated using pooling (the “section 104” pool) with special same-day and 30-day matching rules.
- Crypto received as employment income or from mining/staking can be Income Tax instead.
GOV.UK’s guidance page explains when you need to report and pay.
Network fees and taxes
Network fees are part of your cost. In general terms:
- A fee paid when buying can add to your basis; a fee paid when selling can reduce your proceeds.
- When you pay a Bitcoin or Ethereum network fee in crypto, the coins spent on the fee may themselves count as a disposal in some systems, even if they are tiny. The treatment depends on jurisdiction and circumstances.
The daily log records typical fees with dates, which can help you sanity-check records, but your wallet’s transaction history is the authoritative source for what you actually paid.
Records worth keeping
| Record | Why |
|---|---|
| Date and time of each acquisition and disposal | Holding periods and matching rules |
| Amount and value in your currency at the time | Gains and income |
| Fees paid, and in what asset | Basis and proceeds adjustments |
| Wallet addresses and transaction IDs | Proving transfers between your own wallets |
| Exchange statements and 1099-DA or equivalents | Cross-checking |
Other countries
Many tax authorities publish crypto guidance (for example Canada’s CRA, Australia’s ATO and Korea’s National Tax Service). Look for the official page from your own tax authority rather than relying on summaries, including this one.
Related: self-custody basics and scam warning signs.
Questions people also ask
- Is moving bitcoin between my own wallets taxable?
- Generally no in the US and UK, because you still own the asset. Keep records showing both wallets are yours, and note that the network fee paid in crypto may itself be treated as a small disposal depending on the rules that apply to you.
- Do I need to report crypto if I only bought and held?
- In the US, Form 1040 asks every filer a yes/no digital asset question, and buying with dollars and holding is generally answered “no”. Other countries have their own rules; check the official guidance where you live.
Sources
- IRS: Digital assets
- IRS: Frequently asked questions on virtual currency transactions
- HMRC Cryptoassets Manual
- GOV.UK: Check if you need to pay tax when you sell cryptoassets
Prepared by Daily Crypto News from the sources above. Published 2026-10-15; last reviewed 2026-10-15. See our editorial standards. Not financial, tax or legal advice.