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1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteFor U.S. federal income-tax purposes, cryptocurrency and other digital assets are generally treated as property. That means selling or exchanging them can create a capital gain or loss, while receiving them for work can create income. Keep records of each receipt, purchase, sale, exchange, disposition, transfer, and related fee so you can establish what happened, its U.S.-dollar value, and your tax-return calculations.
This guide covers general U.S. federal rules for individuals. State, local, and non-U.S. tax treatment may differ, and the result for a particular transaction depends on its facts.
How cryptocurrency taxes work
The IRS applies general property-transaction principles to digital assets. Its current digital-asset FAQs cover transactions on or after January 1, 2025; the IRS’s virtual-currency FAQs generally apply to transactions before that date. The IRS uses “digital assets” broadly, including cryptocurrency, stablecoins, and NFTs.
For a sale, capital gain or loss is generally the amount realized minus adjusted basis. In a sale for U.S. dollars, amount realized is generally the cash received, plus the fair market value of any services received to make the sale, less qualifying transaction costs allocable to the disposition. Report the gain or loss in U.S. dollars.
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Basis is generally the amount invested in an asset, adjusted as applicable. It is central to calculating gain or loss: if the basis is missing or wrong, the resulting calculation may be too. Digital assets received for services have a basis generally equal to their fair market value in U.S. dollars when received, provided that value is included in income.
What crypto transactions do I need to report?
Track events by what actually happened—not just by whether a wallet or exchange shows an entry. A receipt, a sale, an exchange, a fee payment, and a transfer between your own accounts can have different tax consequences.
| Event | General federal tax treatment | What to record |
|---|---|---|
| Receiving digital assets for services | May produce income. Cryptocurrency received by an independent contractor for services generally constitutes self-employment income; digital assets paid as employee wages are wages. | Date and time received, asset and quantity, U.S.-dollar fair market value, payer or employer, and records supporting the income reported. |
| Buying digital assets | Record the acquisition and basis. A later sale or other disposition may require a gain-or-loss calculation. | Purchase date and time, asset and quantity, amount paid, fees, account or wallet, and transaction ID or statement. |
| Selling digital assets for U.S. dollars | Generally creates a capital gain or loss measured using amount realized and adjusted basis. | Date and time, asset and quantity sold, proceeds, qualifying disposition costs, basis, and supporting statements. |
| Exchanging one digital asset for another | An exchange can be a reportable disposition. Track both what left and what you received. | Date and time, assets and quantities given and received, fair market value in U.S. dollars, costs, and transaction ID. |
| Moving assets between your own wallets or accounts | The IRS distinguishes an own-wallet transfer from a sale or exchange; do not treat the transfer itself as automatically creating the same disposition result. | Sending and receiving wallet or account, date and time, quantity, transaction ID, and any transfer fee. |
| Paying transaction services with digital assets | The digital assets used or withheld are disposed of, and gain or loss may be recognized. The amount paid may also qualify as a transaction cost. | Asset and quantity used, U.S.-dollar value, service provided, date and time, and any related transaction details. |
Rewards and other receipt events may also need records and tax treatment based on the circumstances. Keep documentation of the event and its U.S.-dollar value rather than assuming every receipt is handled like a sale.
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What records should I keep for crypto taxes?
The IRS requires records sufficient to establish the positions taken on your federal income-tax return. It identifies records documenting receipts, sales, exchanges, dispositions or transfers, and fair market value as examples. In practice, preserve the records that let you reconcile activity and support both income and gain-or-loss calculations.
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- Transaction date and time, asset, quantity, and U.S.-dollar value at receipt, purchase, sale, exchange, or other disposition.
- Purchase cost and records supporting adjusted basis, including acquisition fees.
- Proceeds and the services or property received in an exchange.
- Transaction hashes or other IDs, wallet and account context, and transfer records to reconcile on-chain activity with exchange records.
- Fees, commissions, and gas costs, with enough detail to distinguish costs of a purchase or disposition from a transfer between your own wallets.
- Records supporting income from rewards, services, or other receipt events, where relevant.
- Forms 1099-DA and any correspondence about corrected forms.
Keep records in a form you can retrieve and reconcile. The IRS sufficiency standard does not require a particular app, file format, paper ledger, or wallet-tracking method.
How to track transaction costs and fees
The IRS describes digital-asset transaction costs as cash or property paid for services provided by another to effect a purchase, sale, or disposition. Examples include transaction and gas fees, transfer taxes, and commissions. Cash fees to effect a sale may reduce amount realized.
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Record what a fee paid for, how it was paid, and which transaction it relates to. A fee for moving assets between your own wallets or accounts is not treated as a digital-asset transaction cost in the IRS’s cited FAQ example. If you pay a service fee using digital assets, the assets used or withheld are themselves disposed of; keep their basis and value records as well as the fee details.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do I need to report crypto if I didn’t get a 1099?
Yes. Receiving no Form 1099-DA does not remove the requirement to report taxable digital-asset income, gains, or losses on a federal return. The IRS states: “Whether or not you receive a Form 1099-DA, you must report all income, gains and losses from digital asset transactions on your federal income tax return.”
For 2025 transactions, U.S. brokers generally have Form 1099-DA reporting requirements; foreign brokers may not provide the form. Use your own records to identify and calculate reportable activity, including transactions that do not appear on a broker statement.
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What is Form 1099-DA?
Form 1099-DA is a broker information return for digital-asset dispositions. Brokers generally must report gross proceeds and, in some cases, basis. The IRS’s January 28, 2026 Tax Tip says most Forms 1099-DA for 2025 transactions will not include basis, so taxpayers will need to calculate basis to determine gain or loss. Treat the statement as one source to reconcile against your records, not as a complete account of every transaction or the final tax calculation.
If a form appears incorrect, contact the issuer to request a corrected form. Keep the original and your correspondence, and do not wait to file while seeking a correction; the issuer, not the IRS, handles corrections.
Where crypto records go on an individual tax return
For individuals, capital transactions are generally reported on Form 8949 and Schedule D, subject to the applicable IRS form instructions. The IRS’s digital-asset FAQ directs taxpayers to Form 8949 unless the broker provided a Form 1099-DA with gross proceeds and basis information. Follow the instructions for the applicable tax year and the information reported on your form.
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Digital assets received as income generally go on the applicable individual return or schedule, depending on the facts. Whether an event is capital or ordinary income, and how exceptions apply, can depend on circumstances beyond a recordkeeping overview.
Keep the scope of the rules in view
This article addresses general U.S. federal income-tax principles for individuals; it does not establish state, local, or non-U.S. treatment. Business activity, gifts, mining, staking, DeFi, NFTs, and unusual transaction structures can raise fact-specific questions. For an individual transaction or return position that is uncertain, consult the applicable IRS instructions or a qualified tax professional.
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