XRP Taxes: How to Report, Calculate, and Stay Compliant in 2026

No, XRP is not tax free. If you receive XRP as income or purchase and later sell or swap it for a capital gain or loss, there are tax consequences, and you should prepare accordingly. We’ll show you how.

The IRS treats digital assets as property, so selling, swapping, or spending XRP creates a taxable event that you must report on your tax return.

• Swaps or sales of crypto are capital gains or losses based on holding period. Short-term gains, from XRP held one year or less, are taxed at ordinary income rates of 10% to 37%. Long-term gains, from XRP held more than one year, are taxed at 0%, 15%, or 20%.

The table below shows how the IRS treats common XRP actions on 2025 and 2026 returns.

Start with the lot you sold. Your cost basis is what you paid plus any buy fees. Proceeds are what you received net of sell or swap fees. Proceeds minus basis equals your capital gain or loss.

Since January 1, 2025, you track basis and holding period separately for each wallet and exchange account. When you sell XRP from one account, use the basis of the XRP held in that account. Moving XRP between your own wallets is not a sale, and the XRP keeps its original basis and purchase date.

Track dates to determine whether your XRP capital gains tax is short-term or long-term. Long-term treatment applies only when you hold XRP for more than one year, so a sale on the one-year anniversary of your purchase is still short-term. Finally, bookmark and use our free XRP profit calculator for quick and easy calculations.

Long-term gains are taxed at 0%, 15%, or 20%, based on your taxable income.

Gains above the 15% limit are taxed at 20%. The 3.8% net investment income tax also applies when modified adjusted gross income is above $200,000 (single or head of household), $250,000 (married filing jointly), or $125,000 (married filing separately). Returns for 2025 were due April 15, 2026. Returns for 2026 are due April 15, 2027.

Here's how to report XRP on your tax return, at a glance:

• List each taxable disposal on Form 8949 with dates acquired and sold, proceeds, basis, and result. Split short-term and long-term.

• Check the digital asset box at the top of each Form 8949 page:

  • G or J if your Form 1099-DA reported basis

  • H or K if it didn't

  • I or L if you didn't receive a 1099-DA

  Brokers weren't required to report basis for 2025 sales, so most 2025 sales on a 1099-DA go in H or K.

• If your 1099-DA shows no basis, enter your own basis from your records in column (e).

• Roll totals to Schedule D.

• If your broker reported basis to the IRS and you don't need to make any adjustments, you may qualify to report summary totals directly on Schedule D instead of listing those transactions separately on Form 8949.

• Report XRP income that isn't business income, including "earn" rewards and airdrops, on Schedule 1 (Form 1040), line 8v. Report business income on Schedule C.

Note: Net capital losses offset capital gains first. If losses exceed gains, you can deduct up to $3,000 of other income ($1,500 if married filing separately) and carry the rest forward. Learn more about reporting crypto losses.

Here are the XRP tax issues we see most often, along with how to avoid and fix them fast.

TokenTax gathers your exchange connections, CSVs, and on-chain data into one ledger so crypto tax reporting is clean and complete. We'll help you quickly create Form 8949 and Schedule D income reports.

TokenTax users also have access to:

• Our powerful tax loss harvesting dashboard

• Smart reconciliation powered by AI

• TurboTax and TaxAct exports

• Support from in-house crypto tax experts