Holding crypto for more than one year unlocks long-term capital gains rates — which can be as low as 0%. This example shows how the IRS taxes an ETH sale after 14 months, and why the difference in holding period matters so much.
Check your own ETH holding period →Do I still need to report long-term gains at 0% tax?
Yes. Even if you owe $0 in tax, the transaction must be reported on Form 8949 and Schedule D. Failure to report can trigger IRS notices, especially if your exchange reports proceeds on a 1099-DA.
Can I use a cost basis method other than FIFO?
Yes. The IRS allows FIFO, HIFO (Highest In, First Out), or specific identification. You must make the specific ID election before or at the time of sale, and you need adequate records. HIFO often minimizes taxable gains.
What if I sold only 1 ETH, not both?
Under FIFO, the first ETH purchased is considered sold first. Since both ETH were bought on the same date, either method gives the same cost basis per coin ($1,600 each). A partial sale of 1 ETH would generate a $1,400 long-term gain.
Free, no sign-up, runs entirely in your browser.
Go to Free Calculator →