Reference
What's a taxable event in crypto?
Selling crypto for fiat is taxable. So is swapping one token for another, receiving staking rewards, claiming an airdrop, and most NFT activity. The list is longer than most retail traders realise.
The events that almost universally trigger tax
- Sale of crypto for fiat. The classic case. Capital gain or loss = sale price minus cost basis.
- Crypto-to-crypto swap. Treated as a sale of the outgoing token at fair market value, immediately followed by a purchase of the incoming token. Triggers capital gain/loss on the outgoing leg. Includes BTC→ETH, USDC→USDT, and any DEX swap.
- Spending crypto on goods or services. Treated as a sale at fair market value at the moment of payment. Includes paying with a crypto debit card.
- Staking rewards. Treated as ordinary income at the fair market value when received. Establishes a fresh cost basis for the received tokens.
- Mining rewards (PoW). Same treatment as staking: ordinary income at receipt + fresh cost basis.
- Airdrops. Ordinary income at the fair market value when received and disposable. Cost basis equals that value.
- Hard fork (e.g., BTC→BCH). Income at fair market value when control of the new token is established. Treated similarly to airdrops.
- NFT sale. Capital gain/loss for the seller. Some jurisdictions classify NFTs as collectibles and apply higher rates.
- DeFi LP withdrawal with realised IL. The exit values of the LP tokens vs. their entry value at fair market value at the time can constitute a taxable event.
Events that may or may not be taxable
- Receiving crypto as a gift. Generally not taxable for the recipient (gift tax may apply to the giver above thresholds).
- Wallet-to-wallet transfer. Moving your own tokens between your own wallets is not a taxable event. Watch for the gas cost — the gas paid in tokens is itself a small disposal.
- Buying crypto with fiat. Not taxable. Just establishes cost basis.
- Holding through a hard fork without claiming the new token. Some jurisdictions defer the income event until the new token is claimed/received in a controllable wallet.
- Wrapping/unwrapping (e.g., ETH ↔ WETH). The IRS has not issued definitive guidance; conservative treatment is to consider it a swap; aggressive treatment is to consider it a non-taxable wrapping. Most crypto-tax software defaults to conservative.
Cross-jurisdiction summary
| Event | US | UK | Germany | Australia |
|---|---|---|---|---|
| Sale to fiat | Capital gain | CGT | Tax-free if held ≥1y | CGT (50% discount ≥1y) |
| Crypto-to-crypto swap | Capital gain | CGT | Same as sale | CGT |
| Staking rewards | Ordinary income | Misc. income | Income | Ordinary income |
| Airdrops | Ordinary income | Misc. income | Income | Ordinary income |
| Mining rewards | Ordinary or self-employment | Misc. or trade income | Income | Ordinary or business |
| NFT sale (creator) | Ordinary or capital | CGT or trade income | Income (if business) | CGT |
The El Salvador exception
Since the Bitcoin Law of 2021, transactions in Bitcoin are not subject to capital
gains tax in El Salvador (Ley Bitcoin, Art. 7). The exemption applies to
gains/losses in Bitcoin specifically, not to other cryptoassets, and not to
residents who are also tax-resident in another jurisdiction with a worldwide-income
claim. The provision has been the subject of ongoing IMF discussion in connection
with the Salvadoran sovereign-debt programme.
What the calculator does and doesn't address
The main calculator handles a single sale-to-fiat event. The tax preview applies a flat headline rate. It does not handle: staking-reward income events, airdrop income, hard-fork events, NFT collectible classifications, or jurisdictional special rules (such as Germany's 1-year exemption or El Salvador's Bitcoin exemption). For complete tax treatment use specialised crypto-tax software (CoinTracker, Koinly, TaxBit) or a qualified preparer.