What to Know About Capital Gains Taxes on Stocks and Crypto
Sold some stocks or cashed out your crypto? Before you celebrate those gains, remember—Uncle Sam wants a cut. Here’s what you need to know about how capital gains taxes apply to your investments:
📈 What Is a Capital Gain?
A capital gain happens when you sell an asset like stock or crypto for more than you paid for it. If you sold at a loss, that’s called a capital loss—which can actually help reduce your tax bill!
⏳ Short-Term vs. Long-Term Gains
Short-Term Gains (held 1 year or less) are taxed at ordinary income rates—same as your paycheck.
Long-Term Gains (held over 1 year) get a lower tax rate: typically 0%, 15%, or 20%, depending on your income.
💻 Crypto = Property (Not Currency)
The IRS treats cryptocurrency like property, just like stocks. That means every time you sell, trade, or use crypto to buy something, it’s a taxable event—even if it’s just swapping Bitcoin for Ethereum.
📉 Use Losses to Your Advantage
If you sold assets at a loss, you can use those to offset gains—and even up to $3,000 of regular income per year. This strategy is called tax-loss harvesting.
🧾 What You’ll Need to Report
Form 1099-B for stock sales
Crypto platforms may issue 1099-K or 1099-B, but you’re still responsible for accurate reporting
Use Form 8949 and Schedule D to report gains and losses
✅ Pro Tip: Keep detailed records of what you bought, sold, and when. And remember—HODLing for 12+ months can seriously cut your tax bill!