Plain English
A capital gain is the profit from selling an asset above its cost basis. If you buy Bitcoin at $20,000 and sell at $50,000, your capital gain is $30,000. The gain is a taxable event when realized.
How it actually works
US tax law splits capital gains into two categories. Short-term: gain on assets held one year or less, taxed at your ordinary income rate (up to 37%). Long-term: gain on assets held more than one year, taxed at preferential rates (0%, 15%, or 20% depending on income). The difference can cut your tax bill in half on the same gain. Crypto is treated as property for US tax purposes, so the same rules apply.
What it means for you
For members managing meaningful crypto positions, the timing of sales has direct tax consequences. A gain realized at 11 months may cost twice as much in tax as the same gain realized at 13 months. The discipline: track holding periods deliberately, not accidentally.
We cover the practical mechanics: holding-period tracking, sale-timing strategy, and the coordination with cost-basis methodology to minimize realized tax across years.
Educational content only. Not investment, tax, or legal advice.