Short-term or long-term crypto gains?

A holding period changes the category

For crypto held as a capital asset, one year or less is short-term; more than one year is long-term. Long-term treatment can have a different federal rate, depending on your taxable income and filing status. State tax and other rules may also apply.

A year-old wallet deposit is not evidence that you acquired the asset on that date. A transfer between your own wallets normally keeps the underlying acquisition history.

Follow the units, not just the address

Keep the acquisition date, quantity, USD basis and disposal date for the units actually sold. If an exchange export begins after you moved coins into it, add the earlier acquisition records.

• Match outgoing and incoming self-transfers.
• Use a consistent, supported unit-identification method.
• Check broker-held and unhosted-wallet identification requirements in the current IRS FAQs.

A simple example

Buying an asset for $1,000 and selling the same units for $1,500 creates a $500 gain before adjustments. The holding category affects how that gain is taxed, rather than removing the gain. Fees and other capital gains or losses can change the final return.

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