There is no such thing as capital gains when you are just holding them in your wallet/crypto exchange as long as it's not sold in fiat currency you won't be held liable to capital gains tax and you are not required to report it in you taxes not until you have sold it.
that's not totally true. selling for altcoins is definitely a taxable event under the USA tax code.
let's say you bought LTC with BTC. you're supposed to treat that transaction as if you're selling BTC for USD, then buying LTC with that USD. it's annoying but the 2018 tax code established firmly that cryptocurrency does not qualify for tax-exempt like kind exchanges.
the IRS treats spending BTC on goods and services as taxable too.
Also you really don't jave to worry about the IRS knocking in your door, as long as you didn't falsify any information in your tax report the worst thing you will get is a re-audit for your taxes and you won't go to jail because you didn't know how to compute your taxes in the first place.
i don't believe the IRS has prosecuted any cases like this yet, but one agent has suggested that pleading ignorance may not be good enough:
“We’re usually behind the curve — history is made and then we react to it. But in this case, we are ahead of the curve. We were there on ground zero, and we were waiting for the rest of the world to catch up to what we already knew... We already are aware that there were cases to be made, we just didn’t know if we were at the point where we can bring it for criminal prosecution. We believe we are at that point now. If we had 12 jurors and told them someone made all their money in bitcoin, we believe that they would understand.”
Alford warned that if the IRS can prove that a taxpayer willfully concealed cryptocurrency gains, they might be subject to prosecution. Ignorance of the law is not a good enough excuse, he says, especially if there are records that they kept a spreadsheet of their investments or discussed cryptocurrencies with their accountant.
“You might have bitcoin on everything, but when you go to your accountant, you say, ‘Oh, I’ve never heard of bitcoin.’ Really? Every date you’ve ever been on, that’s all you talked about was bitcoin, but somehow when your accountant asks you, you forgot to talk about it?” Alford says. “That’s our burden to show this individual knew.”
https://www.forbes.com/sites/hanktucker/2019/06/13/irs-agent-who-took-down-silk-road-turns-his-attention-to-recreational-bitcoin-investors/#366d88881ad1
