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Crypto Fair Market Value: Exchange or Peer-to-Peer
This site provides general information, not tax, legal or financial advice. Consult a qualified tax professional. Last verified against IRS pages: October 17, 2026. Examples use made-up numbers for illustration only. Expected marks our own reading, not a published rule.
Short answer: The IRS FAQ gives three cases: on an exchange, use the U.S. dollar amount the exchange records for the transaction; peer-to-peer, use the value at the date and time the transaction is recorded on the ledger, and the IRS accepts an explorer value as evidence; if the crypto has no published value, use the fair market value of what you exchanged for it.
Exchange (Q26)
If the transaction is facilitated by a cryptocurrency exchange, the value is the amount the exchange records for that transaction in U.S. dollars. If it is off-chain on an exchange, the FAQ says to use the amount the cryptocurrency was trading for on the exchange at the date and time the transaction would have been recorded on the ledger if on-chain.
Peer-to-peer or other (Q27)
Value is determined at the date and time the transaction is recorded on the distributed ledger (or would have been). The IRS says it "will accept as evidence of fair market value the value as determined by a cryptocurrency or blockchain explorer that analyzes worldwide indices of a cryptocurrency and calculates the value of the cryptocurrency at an exact date and time." The FAQ adds that if you do not use an explorer value, you must establish that the value you used is an accurate representation of the fair market value. We name no explorer.
No published value (Q28)
If the cryptocurrency is not traded on any exchange and has no published value, its fair market value equals the fair market value of the property or services you exchanged for it when the transaction occurs.
Why it matters
Fair market value at receipt is your income when crypto is received for work or as a reward, and it normally sets your basis for later sales. See paid in crypto for work and airdrops and hard forks. The IRS Digital assets page says to keep the dollar value of assets received as income.
Fictional example
A freelancer is paid in a coin on an exchange; the exchange record shows $520 at 14:05. The freelancer uses $520 as value at receipt. In a wallet-to-wallet payment the same day, they take the explorer value at the time the transaction is recorded and save a screenshot of the time stamp and source.
Caution
The FAQ generally covers transactions completed before January 1, 2025; check IRS.gov for later guidance.
FAQ
Can I use any price website? The IRS names explorers that analyze worldwide indices; otherwise you must establish accuracy.
What if I lost the record? See the records checklist.
What we could not verify
- How the IRS judges whether a non-explorer value is accurate in a specific case.
- Whether later guidance changes these valuation rules for 2025 and 2026 transactions.
- Valuation for NFTs and tokens in thinly traded markets.
- Re-check IRS.gov before acting; pages, forms and instructions change.
Sources (official)
- IRS, Frequently asked questions on virtual currency transactions (the page says it generally applies to transactions completed before January 1, 2025): https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions (read October 17, 2026)
- IRS, Digital assets: https://www.irs.gov/filing/digital-assets (read October 17, 2026)
Not tax advice. Examples use made-up figures. Nothing here has been reviewed by a tax professional. We may earn commissions from affiliate links where marked; see the disclosure.