The US dollar value of a digital asset at the time of a transaction, used to measure income received and proceeds on a disposal. The IRS requires a reasonable method applied consistently, typically a price from a reputable exchange or index at the transaction time.
Every income event and every swap needs a dollar value, and the choice of source and time can move the numbers materially on volatile days. The method has to be consistent across the year and defensible if asked.
A reasonable, consistently applied source at the time of the transaction. Daily closing prices are acceptable for many purposes; for high-volume trading, transaction-time pricing is expected.
Source: IRS Notice 2014-21, Q&A 5; IRS FAQ on virtual currency
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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