Cryptocurrency tax reporting
Every trade is a disposal, including crypto-to-crypto. Most people who think they have nothing to report have a great deal to report.
You are in the right place if…
Active traders
Hundreds or thousands of transactions across several exchanges.
Long-term holders
Fewer transactions, but basis tracking that spans years and wallets.
Staking, mining and DeFi
Income events that arrive without anyone issuing a form.
Everything in the fee
- Transaction reconciliation across exchanges8949
- Capital gains and lossesSch. D
- Staking and mining incomeSch. 1 / C
- Cost basis reconstructionFIFO / specific ID
- NFT and DeFi transaction treatment8949
- Digital asset question on the return1040
- Foreign exchange account reportingFinCEN 114
- Prior-year catch-up filing1040-X
What actually counts as a taxable event
Selling crypto for dollars is obvious. Less obvious, and just as taxable: swapping one token for another, spending crypto on goods, and receiving staking or mining rewards. Moving assets between wallets you own is not a disposal — but exchange exports frequently record transfers as sales, which inflates reported gains dramatically if nobody untangles it.
Basis is the whole job
Exchanges report what happened on their platform and nothing else. Once assets have moved between exchanges and self-custody wallets, no single provider holds the full history, and the cost basis has to be reconstructed from the combined record. This is where the time goes, and it is why crypto returns are quoted separately.
Losses are worth reporting
People who lost money often assume there is nothing to file. Capital losses offset capital gains, a limited amount can offset ordinary income each year, and the remainder carries forward indefinitely. Unreported losses are simply value left behind.
The question on page one
Form 1040 asks directly about digital asset activity, and it is answered under penalty of perjury. Answering it carelessly is a materially worse position than reporting an imperfect transaction history in good faith.