Quick answer
Hold your crypto long enough and the IRS rewards you with a significantly lower capital gains tax rate.
Income Tax
Australia
Canada
India
United States
Long-Term Capital Gains
Gains on crypto held beyond the qualifying holding period, taxed at preferential lower rates in many jurisdictions.
AustraliaCanadaIndiaUnited StatesUnderstanding Long-Term Capital Gains on crypto
Long-term capital gains arise when you dispose of a cryptocurrency after holding it for longer than the qualifying period set by your jurisdiction. In the US, assets held for more than 12 months qualify for preferential long-term capital gains tax rates of 0%, 15%, or 20% depending on income — significantly lower than ordinary income rates of up to 37%. In Australia, the 50% CGT discount applies after 12 months. Germany goes further, offering complete tax exemption for crypto held over one year. India is the notable exception — all VDA gains are taxed at 30% flat regardless of holding period.
Long-term capital gains arise when you dispose of a cryptocurrency after holding it for longer than the qualifying period set by your jurisdiction. In the US, assets held for more than 12 months qualify for preferential long-term capital gains tax rates of 0%, 15%, or 20% depending on income — significantly lower than ordinary income rates of up to 37%. In Australia, the 50% CGT discount applies after 12 months. Germany goes further, offering complete tax exemption for crypto held over one year. India is the notable exception — all VDA gains are taxed at 30% flat regardless of holding period.
What this means for your crypto activity
US long-term rate savings
In the US, qualifying for long-term rates (12+ month hold) can reduce your effective tax rate by half or more.
Germany full exemption
Germany offers complete CGT exemption for crypto held over 1 year — one of the most favourable regimes globally.
Australia 50% discount
Australia's 50% CGT discount effectively halves the taxable gain for assets held 12+ months.
Per-unit holding period
The holding period runs from the acquisition date of each specific unit, not an average.
Rewards reset the clock
Receiving staking rewards or airdrops resets the holding period clock for those specific tokens.
- In the US, qualifying for long-term rates (12+ month hold) can reduce your effective tax rate by half or more.
- Germany offers complete CGT exemption for crypto held over 1 year — one of the most favourable regimes globally.
- Australia's 50% CGT discount effectively halves the taxable gain for assets held 12+ months.
- The holding period runs from the acquisition date of each specific unit, not an average.
- Receiving staking rewards or airdrops resets the holding period clock for those specific tokens.
Seeing it in action
Example scenario
Priya holds 2 ETH bought in January 2023 for $1,800 each. She sells in February 2024 (13 months later) at $3,200 each. Her gain is $2,800. In the US as a married filer with $80,000 total income, her long-term CGT rate is 0% — she pays no tax on the gain. Had she sold in December 2023 (only 11 months), the same gain would have been taxed at her marginal income rate of 22% ($616).
How this works across jurisdictions
- Australia
Individual crypto investors who maintain ownership of an asset for at least 12 months qualify for a statutory 50% capital gains tax discount, which effectively reduces the net taxable gain added to their marginal income filing by half.
- Canada
The Canada Revenue Agency does not provide a long-term discount based on holding duration, applying a uniform 50% inclusion rate to all casual capital gains, following the formal cancellation of the proposed two-thirds inclusion rate hike.
- India
Under the Income Tax Act's rigid Section 115BBH mandate, India completely denies any long-term holding concessions for Virtual Digital Assets, maintaining a uniform flat 30% tax plus a 4% cess on all realized crypto gains.
- United States
Digital assets held for more than 12 months qualify for long-term capital gains tax treatment, subjecting the profit to reduced preferential federal brackets of 0%, 15%, or 20% depending on the taxpayer's overall annual taxable income.
From the KoinX blog
Take Control of Your Crypto Finances
From crypto taxes to accounting, KoinX helps you manage, track, and stay compliant and to end.
![[object Object]](/_next/static/media/ISO_27001-2022_certification.ae776691.svg)
![[object Object]](/_next/static/media/GDPR_Compliance.a2dc5933.svg)
![[object Object]](/_next/static/media/SOC_2_Type_II_certification.dd69381e.svg)
