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Inherited Crypto: Basis at Date of Death

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: For property in general, the basis of property inherited from a decedent is usually its fair market value at the date of death, or the alternate valuation date if the estate chose it. Publication 559 and Publication 544 say that gain or loss on inherited property that is a capital asset is long term regardless of how long you held it, and the Form 8949 instructions say to report such a sale in Part II and enter "INHERITED" in column (b). None of these sources addresses inherited crypto specifically (Publications 551 and 559 do not mention crypto; Publication 544 says the general tax principles for property apply to digital assets), so we apply the general property rule.

The general rule

Publication 551 (12/2025) says that, generally, the basis of property inherited from a decedent is one of the following: the fair market value at the date of death, or the value on the alternate valuation date if the estate's personal representative chose it. When an estate must file a federal estate tax return, beneficiaries generally receive a Schedule A (Form 8971) reporting the estate tax value; certain beneficiaries must use it as initial basis. If you did not receive a Schedule A, Publication 551 says your basis can be determined using the appraised value at the date of death for state inheritance or transmission tax purposes.

Exception for appreciated property

The publication says the rule does not apply to appreciated property you receive from a decedent if you or your spouse gave it to the decedent within one year before death; then basis is the decedent's adjusted basis.

Holding period and Form 8949

Publication 559 (2025) says: "If you sell or dispose of inherited property that is a capital asset, the gain or loss is considered long term, regardless of how long you held the property." Publication 544 (2025) says the same in different words. The instructions for Form 8949 (2025) say that, generally, if you disposed of property that you acquired by inheritance, you report the sale or exchange in Part II (long term) with the appropriate box checked and enter "INHERITED" in column (b). For digital assets the long-term boxes are J, K and L.

Crypto specifics

Publications 551 and 559 do not mention crypto. For a Form 1099-DA, check the basis box against the date-of-death value; a missing or inconsistent figure is handled in wrong basis and missing basis. Digital assets moved into an exchange after inheritance may be reported without basis or as noncovered; the IRS was not read on this case; see covered versus noncovered.

Fictional example

A parent dies holding units of a coin worth $40,000 on that date. A child inherits them and sells all for $46,000 eight months later. Using date-of-death basis, the gain is $6,000, treated as long term under the publications above even though the child held the units under a year.

Not covered

Estate and inheritance taxes were not read.

FAQ

Is there a step-up for crypto specifically? The sources describe property in general.

Which box on Form 8949? See our box guide.

What we could not verify

Sources (official)

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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.