Schedule D and crypto sales: how reporting works
Schedule D totals your crypto gains and losses from a supporting capital gains form. Each crypto sale needs proceeds, cost basis and holding period.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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The IRS treats cryptocurrency as property, so a sale is a capital transaction. To follow your crypto sales to Schedule D, you will gather records for each sale and check how long you held the crypto before you sold it.
What should you gather before you start?
For each sale you need three details: the proceeds, your cost basis, and the holding period. If you bought the crypto, your basis is what you paid plus fees. If you received it as income, your basis is its fair market value when you received it.
How do crypto sales flow to Schedule D?
Crypto sales go on a supporting capital gains form, and the totals carry to Schedule D. Short-term means you held the crypto for one year or less. Long-term means you held it for more than one year. Schedule D combines both into one net capital gain or loss.
- 1Gather sale recordsCheck the proceeds, cost basis, and dates before you enter anything.
- 2List sales on the formPut each sale on your supporting capital gains form. A swap for another crypto belongs here.
- 3Check holding periodOne year or less is short-term. More than one year is long-term.
- 4Figure each gain or lossSubtract cost basis from proceeds. Higher proceeds mean a gain, and lower proceeds mean a loss.
- 5Carry totals to Schedule DThe totals move from the supporting form to Schedule D. Schedule D nets your short-term and long-term results into one net capital gain or loss.
What should you do after you file?
Keep records of every sale, transfer, and basis update for IRS reporting and later sales. Capital losses first offset capital gains. Remaining losses can offset a limited amount of ordinary income, and the rest carries forward.
Frequently asked questions
Yes. A swap is a taxable sale of the crypto you give up, even without cash. You report the gain or loss on your supporting capital gains form, and the crypto you receive starts with a new cost basis.
You still report the sale on the supporting form and Schedule D. The loss lowers your net capital result, and unused losses can offset a limited amount of ordinary income and carry forward.
Keep records for at least three years after you file the return that reports the sale. For basis records, keep them as long as you own the crypto plus that same period.
No. Crypto you earn as payment or mining income is usually ordinary income reported on other forms, not Schedule D. When you later sell that crypto, the sale goes on your supporting capital gains form, with basis at the fair market value when you received it.
