How to report cryptocurrency on your taxes
Report crypto on your US taxes by sorting each event into a capital gain or ordinary income. Sales and swaps go on Form 8949 and Schedule D.
Vahe HakobyanEditor-in-chief
Updated Oct 5, 20263 min readFact-checked
On this page
- Selling, swapping, spending or earning crypto can be taxable.
- Gain or loss is proceeds minus cost basis.
- Report mining, staking and airdrop income when received.
First, sort which events belong on your US tax return. Then gather cost basis, put each event on the right IRS form, and answer the digital asset question. A Crypto Profit Calculator can check the math on a trade.
Which crypto events are taxable?
The IRS treats cryptocurrency as property, not as currency. Selling, swapping, spending or earning crypto can be taxable, but moving crypto between wallets you own is not.
- Selling for dollars
- Trading one crypto for another
- Paying with crypto
- Earning from mining or staking
How do you calculate crypto gains?
For each disposal, subtract your cost basis from the proceeds to find your gain or loss. Basis is what you paid, including fees, and income crypto takes a basis of its fair market value on that date.
How do you report crypto on taxes?
Disposals and income go on different parts of your return. You must report your events even when an exchange sends you no tax form, and moving crypto into your own wallet does not change that.
- 1Gather your basis detailsNote the asset, the date and time you acquired it, the number of units and the fair market value in US dollars.
- 2Report disposals on Form 8949For 2023, the IRS said a digital asset held as a capital asset and then sold, exchanged or transferred goes on Form 8949 and Schedule D.
- 3Report income when you receive itMining, staking and airdrops are ordinary income at fair market value on the date you receive them.
- 4Match pay to worker statusFor 2023, an employee paid in digital assets reported the value as wages, and an independent contractor reported it on Schedule C.
- 5Answer the digital asset questionFor 2023, Form 1040 told filers to check Yes after a sale, exchange or other disposal and No if they only moved assets between their own wallets. The IRS says its virtual currency FAQs cover transactions completed before January 1, 2025.
What should you do after filing?
Keep records that show the dates, amounts, wallet addresses and fair market value of each event. For 2023, the IRS said inaccurate income reporting may lead to interest and penalties.
Frequently asked questions
Usually not. Buying and holding creates no gain or loss, and for 2023 it did not require a Yes answer on Form 1040.
A theft is not a sale, so there is usually no gain or loss to report. Any deduction follows the IRS theft loss rules.
Yes. Many products handle Form 8949, Schedule D and Schedule C, so check that yours covers your income types.
You report the same US events as with a domestic exchange, and a foreign exchange can raise foreign account reporting questions.
