US Crypto Tax Reporting: What the IRS Requires
The IRS treats cryptocurrency as property, which means every sell, swap, spend, or conversion is a taxable event that must be reported on your federal return. Form 1040 includes a digital assets question that every filer must answer, and enforcement is increasing every year. Whether you traded on Coinbase, Binance, or Kraken, you need accurate records of every disposal to calculate your capital gains and losses correctly.
How US crypto taxes work
- Capital gains and losses: Each time you sell, swap, or spend crypto, you must calculate the difference between your proceeds and your cost basis. This gain or loss is reported on Form 8949 and summarized on Schedule D.
- Short-term vs. long-term: If you held an asset for 365 days or less before disposing of it, the gain is short-term and taxed at your ordinary income rate. Holdings longer than 365 days qualify for long-term capital gains rates (0%, 15%, or 20% depending on your bracket). High earners may also owe the 3.8% Net Investment Income Tax (NIIT) on top of these rates.
- $3,000 capital loss deduction: If your total capital losses exceed your gains, you can deduct up to $3,000 per year against ordinary income. Remaining losses carry forward to future tax years.
- Staking and rewards income: Staking rewards and earn income are taxed as ordinary income at fair market value on the date received (per Rev. Rul. 2023-14). Generally reported on Schedule 1. Exchanges may issue a 1099-MISC for reportable rewards; the applicable threshold can vary by year - check IRS Publication 1099 for the current figure. Starting 2025, qualifying disposal proceeds may also appear on a Coinbase Form 1099-DA.
- Stablecoin swaps: Converting USDC to DAI or any other stablecoin-to-stablecoin trade is a taxable disposal. Even if the value barely changes, you must report it.
Form 1099-DA: New Broker Reporting from 2025
Form 1099-DA is the new IRS broker form for digital-asset gross proceeds. Custodial brokers must report gross proceeds for brokered digital-asset sales effected on or after January 1, 2025. Taxpayers began receiving the first 1099-DAs during the 2026 filing season for 2025 dispositions. Mandatory cost-basis reporting does not begin until transactions effected on or after January 1, 2026 - so many 2025 forms will still require you to reconstruct basis on your own.
A 1099-DA is evidence, not the complete tax result. You still need to calculate your own gains and losses using your full transaction history. Not all exchanges issue 1099-DA - Binance, for example, does not issue any IRS tax forms to most users. The form also does not cover staking income, airdrops, DeFi activity, or transfers between your own wallets.
If you receive a 1099-DA showing gross proceeds, reconcile it against your cost basis and actual gains rather than treating it as a ready-to-file number. Missing 1099-DA forms do not make a taxable trade non-taxable - the Form 1040 digital-asset question and Form 8949 filing requirement apply regardless of whether you received an information return.
IRS crypto enforcement
The IRS has significantly increased crypto enforcement through Operation Hidden Treasure, a dedicated team trained to find unreported crypto income. The IRS has also issued John Doe summons to Coinbase, Kraken, and other exchanges, requiring them to turn over user transaction data.
The digital assets question on the front page of Form 1040 means the IRS is tracking who reports crypto and who doesn't. Accurate reporting is expected.
Wash sale rule and crypto
The wash sale rule currently does not apply to cryptocurrency. Unlike stocks and securities, you can sell crypto at a loss and immediately rebuy the same asset without the loss being disallowed. This is a legitimate tax-loss harvesting opportunity.
However, proposed legislation (including provisions in earlier versions of the Build Back Better Act) would extend wash sale rules to digital assets. As of early 2026, this has not been enacted into law. If and when it passes, DYOR.tax will update accordingly.
Lot matching: FIFO default and specific identification
The IRS default rule is FIFO (First In, First Out): each disposal is matched to the earliest available lot of that asset unless you make an adequate specific identification. LIFO or highest-basis approaches can work, but only if implemented as a valid specific identification strategy - meaning you identify the particular lot being disposed of by its acquisition date, purchase price, or another sufficient identifier at or before the time of the sale.
From 2025 onward, lot matching rules operate at the wallet or broker-custody level, not as a loose universal pool. For broker-held assets, specific identification generally must be communicated to the custodial broker using the broker's permitted process. During 2025, Notice 2025-7 gave temporary relief allowing taxpayers to document identification on their own records or via a recorded standing order, even if the broker's systems were not yet ready. The calculator applies FIFO by default and builds cost basis queues from your full trading history.
Form 8949 and Schedule D
Your paid PDF report includes a capital gains filing table mapped directly to IRS forms. Each disposal is classified into Form 8949 Part I (short-term, held 365 days or less) or Part II (long-term, held more than 365 days). The summary totals flow to Schedule D. For assets without a 1099-DA, use Box I for short-term and Box L for long-term on Form 8949.
What's in the report
Your full PDF includes: a capital gains filing table mapped to Form 8949 and Schedule D, crypto income summary for Schedule 1, top assets by P&L, end-of-year holdings with cost basis, a complete transaction audit trail, and filing instructions with step-by-step guidance for your IRS return. Missing cost basis is flagged so you know exactly which transactions need attention.
Supported exchanges
Upload your CSV from Coinbase (35+ transaction types), Binance (75+ operations), or Kraken (ledger format with refid pairing). Each parser handles the exchange's unique CSV format and maps transaction types to their tax treatment automatically. If your US tax year also ran through a broker or payments app, use our Robinhood, Cash App, Gemini, Binance.US, PayPal, or Uphold pages for the exchange-specific export workflow.
DeFi and wallet scanning
If you also used DeFi protocols or self-custody wallets, add your wallet addresses to merge on-chain activity with your exchange CSV. We scan 41+ EVM chains, Solana, and Bitcoin, covering 8,000+ DeFi protocols including Uniswap, Aave, Lido, and more. Cross-source self-transfer detection prevents double-counting when you move funds between your own accounts.
Bitcoin wallet support
Hold BTC in a hardware wallet or self-custody? Add your Bitcoin addresses (P2PKH, P2SH, Bech32, or Taproot) and we scan your full UTXO transaction history. Up to 3 BTC addresses per report. BTC transactions are priced via CryptoCompare and merged with your exchange data for a single unified report.
US crypto tax deadline
The federal tax deadline for the 2025 tax year is April 15, 2026. See US crypto tax deadline 2026 for key dates, Form 4868 extension details, and penalty information.
Other countries
We also generate country-specific reports for the UK (Section 104 pooling), Canada, Australia, New Zealand, India, and South Africa. Each report applies the cost basis method, tax rates, and filing rules for that country.