Crypto Tax Glossary: US & UK Terms Explained (2026)

HMRC's anti-avoidance rule that matches a disposal against crypto of the same type bought within the following 30 days, using that later cost instead of the Section 104 pool. It stops someone selling to crystallize a loss and immediately buying back in.

A free distribution of tokens to wallet addresses, often for marketing or a protocol launch. Whether it's taxed on receipt depends on whether it was given in exchange for an action (ordinary income) or received unsolicited — IRS and HMRC treatment differs by circumstance.

The amount of capital gains a UK taxpayer can realize each tax year before Capital Gains Tax applies. Currently £3,000 for individuals, down from £12,300 in earlier years.

Profit realized when a crypto asset is disposed of — sold, swapped, or spent — for more than its cost basis. Taxed differently from ordinary income in both the US and UK.

The result when a crypto asset is disposed of for less than its cost basis. Can offset capital gains and, within limits, other income.

The original value of a crypto asset for tax purposes — generally what was paid to acquire it, plus associated fees. Used to calculate gain or loss on disposal. See the full Cost Basis Methods guide for how it's calculated.

HMRC's official term for cryptocurrencies, tokens, and other blockchain-based digital assets, used throughout the Cryptoassets Manual instead of "cryptocurrency."

The IRS's broad tax term covering cryptocurrency, stablecoins, and NFTs. Treated as property rather than currency under IRS Notice 2014-21.

HMRC's term for any event that can trigger Capital Gains Tax — selling, swapping, spending, or gifting a cryptoasset (outside of spouse or civil partner transfers).

A cost basis method where the earliest-acquired units of a crypto asset are treated as the first ones sold. One of the two methods the IRS formally recognizes for calculating gains.

A protocol change that splits a blockchain, sometimes creating a new token. IRS guidance treats new tokens received from a hard fork as ordinary income at fair market value when received.

A new IRS information return that digital asset brokers must file reporting sale and exchange proceeds. Gross-proceeds reporting began with 2025 transactions (forms arriving in early 2026); mandatory cost basis reporting for covered assets phases in for 2026 transactions.

The IRS form used to report each individual crypto sale, swap, or disposal — listing proceeds, cost basis, and gain or loss — before totals flow to Schedule D.

A crypto asset where each unit is interchangeable with any other unit of the same type, such as Bitcoin or Ether — as opposed to a non-fungible token (NFT).

A network transaction fee paid to process a blockchain transaction. Gas fees can generally be added to cost basis or, in some cases, treated as a selling expense that reduces proceeds.

A lot-selection strategy where the highest-cost units are treated as sold first, minimizing reported gain. It's executed within a valid Specific Identification framework — not a standalone IRS-recognized method.

His Majesty's Revenue and Customs — the UK tax authority responsible for crypto tax guidance and enforcement.

The length of time a crypto asset is owned before disposal. In the US, it determines whether a gain is taxed at short-term or long-term rates — the line falls at exactly one year.

The Internal Revenue Service — the US federal agency responsible for crypto tax guidance, enforcement, and the Notices and Revenue Rulings referenced throughout this site.

A lot-selection strategy treating the most recently acquired units as sold first. Like HIFO, it's a strategy applied within Specific Identification, not an independently recognized IRS method.

A tax deferral provision (IRC Section 1031) some argued historically applied to crypto-to-crypto trades. The 2017 Tax Cuts and Jobs Act limited Section 1031 to real property, so it does not apply to crypto swaps.

A US gain on a crypto asset held for more than one year before disposal, taxed at preferential rates rather than ordinary income rates.

A unique, non-interchangeable crypto asset representing ownership of a specific item or piece of content. Some NFTs may be taxed as collectibles under IRS Notice 2023-27. See the full NFT Capital Gains Tax guide.

An additional 3.8% US federal tax on net investment income, including crypto capital gains, for taxpayers above certain income thresholds.

Income taxed at standard income tax rates rather than capital gains rates. Staking rewards, mining income, and some airdrops fall into this category.

The IRS's foundational classification of cryptocurrency under Notice 2014-21 — crypto is treated as property, not currency, meaning general tax principles for property transactions apply.

A gain or loss that becomes taxable because a disposal event has occurred, as opposed to an unrealized gain or loss on an asset still held.

An HMRC matching rule requiring disposals to be matched first against crypto acquired on the same day, before applying the 30-day rule or the Section 104 pool.

The IRS form summarizing total capital gains and losses from Form 8949, filed alongside Form 1040.

HMRC's "pooling" method that averages the cost of all units of a particular cryptoasset held, applied once the same-day and 30-day matching rules have been worked through.

The UK's annual tax return system through which individuals report crypto capital gains and income to HMRC.

A US gain on a crypto asset held for one year or less, taxed at ordinary income tax rates rather than preferential long-term rates.

An IRS-recognized cost basis method that lets a taxpayer identify exactly which units of crypto were sold, provided adequate records are kept. FIFO and Specific Identification are the two methods the IRS formally recognizes.

Income earned for participating in a proof-of-stake network's validation process. Per IRS Revenue Ruling 2023-14, taxed as ordinary income at fair market value once the taxpayer gains "dominion and control" over the reward.

A crypto-to-crypto trade, such as exchanging Bitcoin for Ether. Both the IRS and HMRC treat swaps as taxable disposal events, not tax-free exchanges. See Do You Pay Tax on Crypto-to-Crypto Swaps?

The 12-month period tax obligations are calculated over. The US tax year is the calendar year; the UK tax year runs April 6 to April 5.

Moving crypto between wallets or exchanges the taxpayer controls. Not a disposal event and doesn't trigger tax, provided cost basis records carry over correctly.

A rule (IRC Section 1091) disallowing a loss deduction when a "substantially identical" security is repurchased within 30 days. Because crypto is currently classified as property rather than a security, this rule does not apply to crypto today — though proposed legislation could change that. See the full Crypto Wash Sale Rule guide.