Is Swapping Crypto Taxable in 2025?

TL;DR:

If you’re trading crypto for crypto, yes – it’s likely taxable. In this guide, we’ll explain exactly how crypto-to-crypto tax rules work in 2025. We’ll cover what global tax authorities say about swaps, how to report them, and why record-keeping matters more than ever. Whether you're a casual trader or swapping tokens daily, you need to know how these moves are treated under current regulations.

Swapping Isn’t Tax-Free

Swapping one crypto for another – like trading ETH for BTC or USDC – feels routine these days. With tools like Symbiosis.finance and other DeFi platforms making cross-chain swaps easy, it’s tempting to assume that these kinds of trades fly under the tax radar.

But here's the catch: most tax authorities disagree.

In the eyes of agencies like the IRS (U.S.), HMRC (UK), and the ATO (Australia), a crypto swap is treated like selling one asset to buy another. It doesn’t matter that you didn’t convert to fiat – what matters is that you're disposing of one asset and acquiring another. That makes it a taxable event under most crypto tax rules.

Each swap triggers a capital gain or loss based on the asset’s market value at the time of the trade.

Are Crypto Swaps Taxable in 2025?

Let’s make it clear: yes, swapping crypto is generally taxable in 2025. It might seem simple – say, exchanging ETH for BTC – but that simplicity doesn’t translate to tax-free.

Why Crypto Swaps Are Taxed

In most jurisdictions, swapping tokens is treated as disposal + acquisition. The IRS, for instance, sees this as selling the first token (ETH) and immediately buying another (BTC). That triggers a capital gains tax on crypto, regardless of whether you received any fiat.

Example:

• You bought 1 ETH for $2,000.

• You swap it for BTC when ETH is worth $3,000.

• Your crypto gain is $1,000 – and that’s taxable income.

This isn’t always the case, however. For example, in Dubai, individual investors are not subject to taxes on cryptocurrency transactions at all, including crypto-to-crypto swaps.

Why Record-Keeping Is Non-Negotiable

With so many taxable events tied to each crypto move, reporting crypto transactions correctly is critical. Tax authorities want you to track:

• The date of each swap.

• The fair market value (FMV) of both assets at the time of the swap.

• Any associated fees.

Even with tax software, your personal responsibility is to ensure records are accurate and complete – especially as IRS crypto guidelines continue to tighten.

How to Calculate Capital Gains (or Losses)

When you swap crypto, think of it like this: you’re selling one coin and immediately buying another.

Here’s the formula:

Capital Gain or Loss = FMV at time of swap − Cost basis (original purchase price)

Example:

• You bought 1 ETH for $2,000.

• You swapped it when ETH was worth $3,000.

• Capital gain: $1,000.

That $1,000 is taxable and must be included in your 2025 return under crypto gains.

Short-Term vs Long-Term Crypto Tax Rates (U.S)

Not all gains are taxed the same.

• Short-term gains (crypto held < 1 year): Taxed as regular income. In the U.S., that’s anywhere from 10% to 37%.

• Long-term gains (held > 1 year): Taxed at reduced rates – 0%, 15%, or 20%, depending on your income.

Example:

• Bought BTC in Jan 2024, swapped in June 2024? That’s short-term.

• Bought in Jan 2023, swapped in Feb 2025? That’s long-term, potentially saving you money.

Understanding this crypto tax timing can help optimize your strategy.

What If You Lost Money on a Swap?

Even a loss needs to be reported. In fact, reporting losses can benefit you:

• Offset capital gains elsewhere (crypto or traditional assets like stocks).

• Reduce your taxable income (up to $3,000 per year in the U.S.).

Example:

• You bought 2 ETH for $8,000.

• You swap them for SOL worth $5,000.

• Capital loss: $3,000.

That loss can reduce your tax bill or be carried forward to offset future gains.

When Swaps Aren’t Taxable

There are exceptions. If you're simply moving crypto between wallets or accounts that you own – say from Coinbase to MetaMask – that’s not a taxable event. There’s no change in ownership, so there’s no disposal and no capital gains to report.

Still, you should document these internal transfers to avoid confusion during tax season.

Taxable events in swapping crypto compared 

International Tax Perspectives on Crypto Swaps

While many tax authorities consider these swaps taxable events, the specifics can vary significantly depending on the jurisdiction. 

United States: Crypto Swaps Are Taxable Events

In the U.S., the Internal Revenue Service (IRS) treats cryptocurrencies as property. This classification means that exchanging one crypto asset for another – such as swapping ETH for BTC – is a taxable event under crypto-to-crypto tax rules.

For example, if you purchased 1 ETH for $2,000 and later exchanged it for BTC when ETH’s FMV was $3,000, you would have a capital gain of $1,000. That gain must be reported on your tax return and is subject to capital gains tax on crypto.

Beginning in 2025, new IRS regulations will require brokers to report digital asset transactions directly to the IRS. This change increases transparency and enforcement, meaning fewer crypto swaps will go unreported. 

United Kingdom: HMRC Treats Swaps as Disposals

In the UK, Her Majesty’s Revenue and Customs (HMRC) also considers crypto-to-crypto swaps to be disposals, making them subject to Capital Gains Tax (CGT). This applies even if the transaction doesn’t involve fiat currency.

As of the 2024–2025 tax year, the annual CGT allowance has been reduced to £3,000. Any capital gains that exceed this threshold are taxed at 10% for basic-rate taxpayers and 20% for higher-rate taxpayers.

HMRC is actively monitoring crypto transactions. In recent years, it has issued “nudge” letters to individuals suspected of underreporting their crypto income or gains, signaling a strong focus on reporting crypto transactions accurately.

Australia: ATO Considers Swaps as Capital Gains Events

In Australia, the Australian Taxation Office (ATO) takes a similar stance. Crypto is classified as property, and crypto-to-crypto swaps are recognized as capital gains tax events. This means that whenever you exchange one cryptocurrency for another, you must report any capital gain or loss incurred from the transaction.

If you hold the cryptocurrency for more than 12 months before the swap, you may qualify for a 50% CGT discount, reducing your taxable gain significantly. This tax incentive encourages long-term holding and planning.

The ATO is also making efforts to ensure compliance. It actively utilizes data-matching programs to identify users who fail to report taxable crypto activities, increasing the likelihood of audits or penalties for non-compliance.

Switzerland: Private Investors May Be Exempt

Switzerland offers a more nuanced and often favorable tax environment for crypto users. For private individuals, capital gains from selling or exchanging cryptocurrencies are generally tax-free, provided the activity is part of private wealth management and not conducted in a professional capacity.

However, if you're classified as a professional trader – meaning your activity is frequent, profit-driven, or business-related – your gains may be taxed as income rather than capital gains. Furthermore, all individuals must declare their crypto holdings for wealth tax purposes, which vary by canton. 

Reporting Crypto Swaps on Your Taxes

Accurate and timely reporting of crypto swap tax implications is essential for legal compliance and financial clarity. 

Essential Tax Forms in the United States

If you're filing taxes in the U.S., the IRS requires that each crypto swap be reported using specific tax forms:

• Form 8949: This form is used to detail each individual disposal of cryptocurrency – including swaps. You’ll need to provide the following for each transaction:

  1. Description of the asset (e.g., 0.5 BTC).

  2. Date acquired.
     Date sold or exchanged.

  3. Proceeds (the fair market value at the time of the swap).

  4. Cost basis (what you originally paid, including fees).

  5. Capital gain or loss.
     
     

• Schedule D (Form 1040): This schedule summarizes all capital gains and losses from Form 8949.

• Form 1040: Your standard individual income tax return, where totals from Schedule D are included.

If you received crypto as income – through mining, staking, airdrops, or services rendered – you may also need to file additional forms, such as Schedule 1 (Additional Income) or Schedule C (Profit or Loss from Business), depending on how the income was earned and classified.

Leveraging Crypto Tax Software

Managing dozens – or hundreds – of swaps manually can be overwhelming. Fortunately, software solutions like Koinly, CoinTracker, and Crypto Tax Calculator are designed to simplify this process. These platforms offer key features such as:

• Automatic import of transaction histories from wallets and exchanges.

• Capital gains and loss calculations using methods like FIFO and LIFO.