The tax rate on long-term capital gains is lower because you do not have to sell crypto or participate in taxable events to recognize your profit. The short-term capital gains tax rate is generally 10% and the long-term capital gains tax rate is 15%, plus NII for higher-income individuals. The tax rate varies, and both types of capital gains are subject to different rates. In a recent article in The New York Times, tax expert David Axelrod wrote about the importance of calculating crypto capital gains in advance. Short-term trading, on the other hand, may be better for tax savings. Long-term crypto trading may save them money in taxes, as long as the crypto is held for a year or more. Short-term versus long-term capital gainsĬrypto currency investors and traders should consider the tax implications of long-term and short-term capital gains.
