Capital Gains

Capital gains are the profit you make when you sell an asset for more than you paid. Buy a token for $1,000, sell it for $1,300, and the $300 is a capital gain. If you sell for less than you paid, the shortfall is a capital loss. The gain is distinct from income the asset pays while you hold it, such as yield or distributions, which are generally taxed separately.

In the US, capital gains are generally taxable in the year you sell, and the rate depends on how long you held the asset. Property held more than a year typically qualifies for lower long-term capital-gains rates; held a year or less, the gain is short-term and taxed at ordinary-income rates. The IRS has treated crypto assets as property since 2014, so selling, or even swapping one token for another, can be a taxable event.

For tokenized real-world assets this has real consequences. Selling a tokenized real-estate token on a secondary market, or redeeming it at a profit, can trigger a gain. Because blockchains record every transfer, your cost basis and sale price are on-chain, but the token's legal wrapper determines how the gain is reported.

Tax treatment is specific to your situation, jurisdiction, and the deal structure, and rules can change. The figures and categories here describe the general US framework as of 2026 - confirm the current rules and how a particular token is classified before relying on them.

Source: IRS (irs.gov), as of 2026.