Technical Definition

Taxable event

A taxable event is a transaction or activity that creates a tax consequence under the rules of the relevant jurisdiction.

By Crypto University Editorial
Cost basisFIFOForm 1099-DA

✦ Key Insight

Users who treat only cash withdrawals as taxable may overlook swaps, spending or income-generating activities that local rules require them to report.

✕ Common Misconceptions

A taxable event is jurisdiction-specific. Rules from the United States should not automatically be applied to another country.

Detailed Explanation

In crypto, selling, exchanging or spending assets can have tax consequences in many jurisdictions. Receiving crypto as compensation, mining or staking income can also be treated differently depending on local law.

In Practice

“The IRS states that selling, exchanging or otherwise disposing of a digital asset held as a capital asset may need to be reported on Form 8949.”

Dig Deeper

CARF

CARF is the OECD's international framework for standardized collection and automatic exchange of tax-relevant information about certain crypto-asset transactions.

Cost basis

Cost basis is the tax value assigned to an asset, generally based on acquisition cost and applicable adjustments, that is used when calculating gain or loss.

FIFO

FIFO is an accounting identification method that treats the earliest acquired units of an asset as the first units disposed of when applicable rules require or permit that method.

Form 1099-DA

Form 1099-DA is a United States tax information form used by applicable brokers to report digital asset sales or dispositions to customers and the IRS.

Capital Gain

A capital gain is the positive difference recognized when a capital asset is disposed of for more than its tax basis.