Fair market value (FMV): what it means for crypto tax
Fair market value is the price an asset would fetch on the open market at a given moment. FMV is used to value crypto received as income, and to value both sides of a crypto-to-crypto trade, converted to your local currency.
General information, not tax advice. Crypto tax rules differ by country and change over time, verify against your country's guidance or a qualified advisor.
An example
If you receive an airdrop when the token trades at 5, its FMV on receipt is 5 per token, which is both your income and your cost basis.
Why it matters for your tax
Every income receipt and every swap needs an FMV on its own date. Getting those valuations right, on the correct day, is what keeps income and later gains consistent.
CryptaTax handles this automatically across your wallets and exchanges, so the concept is applied consistently without you tracking it by hand. Try the crypto tax calculator →
Related terms
See the full crypto tax glossary for every term, or the crypto tax guides for how they fit together.
FAQ
Fair market value is the price an asset would fetch on the open market at a given moment. FMV is used to value crypto received as income, and to value both sides of a crypto-to-crypto trade, converted to your local currency.
See the crypto tax glossary for related terms, or the crypto tax guides for worked examples. Rules differ by country, so check your country's rules.