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Taxable event
A taxable event is a transaction that creates something to report for tax. In the US, the IRS treats crypto as property, so selling it, swapping it for another coin, spending it, or receiving it as pay or rewards is taxable; buying with dollars and simply holding is not.
What it means for you. In the US, every coin-to-coin swap and every purchase paid in crypto counts as a disposal with its own gain or loss, even when no dollars reach your bank. The IRS says moving coins between your own wallets is not taxable, even if you receive an information return for it. Your records of what you paid, and when, turn each event into a number.
Sources: IRS: Digital assets, IRS: Frequently asked questions on virtual currency transactions · checked 4 October 2026
Capital gains
A capital gain is the profit when you sell or swap an asset for more than its cost basis — what you paid, including fees. Selling for less produces a capital loss. In the US, the IRS treats crypto as property, so these rules apply to it.
What it means for you. In the US, how long you held a coin sets the treatment: one year or less is short-term, taxed at ordinary income rates; more than one year is long-term, taxed at lower rates. Net capital losses offset gains, only a limited amount can be deducted against other income each year, and the rest carries forward to later years.
Sources: IRS: Frequently asked questions on virtual currency transactions, IRS Topic 409: Capital gains and losses · checked 4 October 2026