A realized gain happens when you sell, swap, or spend an asset for more than its basis. An unrealized gain is appreciation on something you still hold. Only realized gains are taxed.
Realized: sold, swapped, spent, or gifted above the annual exclusion. Unrealized: still held. Moving coins between your own wallets realizes nothing.
Crypto investors are surprised in both directions: no tax on a coin that doubled while you held it, and a full tax bill on a swap you never cashed out. The trigger is the disposal, not the dollars.
Yes. Swapping one coin for another is a disposal of the first coin at fair market value.
Source: IRS Notice 2014-21; IRC 1001
Last reviewed September 17, 2026. Tax rules change; confirm current law before acting.
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