How to Report Crypto on Taxes: A Step-by-Step Beginner Walkthrough (2026)

Short answer: you report crypto on your federal return in four places. You answer the digital asset question on Form 1040. You list each sale, swap or spend on Form 8949. You carry the totals to Schedule D. You report crypto you received as income, such as staking rewards, on Schedule 1 or Schedule C. This walkthrough covers each step for the 2026 tax year, what the new Form 1099-DA changes and a worked example. It is education, not tax advice.

Before you start: what counts as reportable

The IRS treats crypto and other digital assets as property. Our guide do you pay taxes on crypto if you don't sell covers every taxable event. The short version: you generally have something to report if during the year you:

• sold crypto for dollars
• swapped one crypto for another
• spent crypto on goods or services
• paid a network fee with crypto
• received crypto from staking, mining, an airdrop or as pay

Buying with dollars, holding and moving coins between your own accounts are not sales. Keep records of those moves anyway. They prove your cost later.

Step 1: Answer the digital asset question on Form 1040

Near the top of Form 1040 is a yes or no question. It asks whether at any time during the year you received a digital asset as a reward, award or payment, or sold, exchanged or otherwise disposed of one.

The IRS digital assets page explains how to answer it.

• Check "No" if you only held crypto, only bought it with dollars or only moved it between your own wallets and accounts.
• Check "Yes" if you sold, swapped, spent or received crypto. A transfer between your own wallets where you paid the fee in crypto also counts as a transaction.

Answering "Yes" does not mean you owe tax. It means you have transactions to report.

Step 2: Gather every record and every form

Collect these before you calculate anything:

• Every Form 1099-DA from US brokers you used. Brokers typically send them by mid-February of the year after the trades.
• Full transaction histories downloaded as CSV files from every exchange and app, including ones you closed.
• Self-custody wallet history for any swaps or payments made outside an exchange.
• Any Form 1099-MISC or 1099-NEC for crypto rewards or crypto pay.
• Your own notes on transfers between your accounts.

The habits behind a crypto trading journal work for taxes too: date, asset, units, dollar value, fees and account.

Step 3: Understand your Form 1099-DA

Form 1099-DA is the crypto version of the 1099-B from a stock account. The IRS guide to Form 1099-DA says brokers use it to report proceeds and in some cases basis to you and to the IRS.

The rules phase in:

• 2025 transactions: brokers must report gross proceeds. Most forms will not show basis, so you calculate it yourself.
• 2026 transactions: brokers must also report basis on certain transactions. In practice that means coins bought on that same platform on or after January 1, 2026.
• Coins moved in from elsewhere: the broker usually does not know what you paid, so basis may be blank or marked as not reported.

Foreign exchanges may not send a 1099-DA. Self-custody wallets and decentralized platforms that never hold your coins are not covered by these broker rules. Either way the IRS says you must report all gains, losses and income. If the form is wrong, ask the broker for a corrected one. The IRS cannot correct it for you.

Step 4: Work out cost basis and holding period

For each sale or swap you need:

• Proceeds: the dollar value you received. For a swap it is the fair market value of the crypto you got at the time of the trade.
• Cost basis: what you paid in dollars, including transaction fees and other buying costs. The Form 8949 instructions confirm that fees count toward basis.
• Date acquired and date sold. Held one year or less is short-term. Held more than one year is long-term.

Gain or loss is proceeds minus basis. Long-term gains usually get lower rates than short-term gains.

Since January 1, 2025 basis is tracked wallet by wallet and account by account, not as one big pool. If you do not identify specific units, the default is generally first in, first out within that wallet or account. For trades on a broker after December 31, 2025, specific units must be identified to the broker by the time of the sale, either per trade or with a standing order. The IRS digital asset FAQs cover these rules in detail.

Fees also come out of proceeds when you sell. If you trade often, our explainer on maker and taker fees shows where those costs hide.

Step 5: Fill in Form 8949 with the right box

Form 8949 is where each crypto sale, swap or spend is listed. Part I is short-term. Part II is long-term. At the top of each part you check one box. The 2025 instructions added six boxes just for digital assets and they say clearly not to use box C or F for crypto.

Your 1099-DA has an "Applicable checkbox on Form 8949" area near the top that tells you which box to use. Each row lists the asset and exact units, date acquired, date sold, proceeds, basis, any adjustment code and amount, and the gain or loss.

If your 1099-DA shows the wrong basis, the instructions use code B. With box H or K you enter the correct basis in column (e) and zero in column (g). With box G or J you enter the basis the broker reported, then the correction in column (g). Keep the purchase records that prove the right number.

There is one shortcut. If every 1099-DA shows basis was reported to the IRS and you need no adjustments, you may be able to skip Form 8949 for those trades and enter the totals directly on Schedule D line 1a or 8a. The instructions list the exact conditions under "Exception 1."

Step 6: Carry the totals to Schedule D

Schedule D nets everything together. Part I totals go to the short-term section and Part II totals to the long-term section. The result flows to Form 1040.

If your losses are bigger than your gains, you can deduct up to $3,000 of the net loss against other income, or $1,500 if married filing separately. The rest carries forward to future years, per IRS Topic 409.

Want a rough idea of the number before you file? Our free crypto tax calculator gives a federal estimate from your gains and income. It is a planning tool, not a filed return.

Step 7: Report crypto income in the right place

Crypto you receive as income is not a sale, so it does not start on Form 8949. The IRS lists where each type goes:

• Staking, mining, airdrops and similar rewards you receive as an individual: generally Schedule 1, in the "digital assets not reported elsewhere" line, at fair market value when you gained control of them. The IRS still lists Revenue Ruling 2023-14 on staking, and a 2026 Tax Court memo held staking rewards are income.
• Crypto paid to you as an independent contractor: Schedule C, along with your other business income and expenses.
• Crypto paid as wages: it should already be on your W-2.

The dollar value you report as income becomes your basis in those coins. When you sell them later, that sale goes on Form 8949 like any other.

Worked example: one simple year

Here is a made-up example. The numbers are an illustration only. During 2026 Maya had four crypto events.

1. Bought and sold on one US exchange. She bought units in January 2026 for $2,000 plus a $10 fee. She sold them in September for $2,587 after fees. Her 1099-DA shows proceeds and a basis of $2,010 reported to the IRS. Short-term gain: $577. Form 8949 Part I, box G.
2. Sold coins she moved in. She bought units on another exchange in 2024 for $1,800 and moved them to her current exchange in 2025. In June 2026 she sold them for $3,000. Her 1099-DA shows proceeds but no basis. She uses her own purchase record. Long-term gain: $1,200. Part II, box K.
3. Swapped in a self-custody wallet. In October she swapped coins with a basis of $1,900 for another crypto worth $1,500 at that moment. No 1099-DA. Short-term loss: $400. Part I, box I.
4. Staking rewards. She received rewards worth $240 when they hit her account. Schedule 1 as other income. Her basis in those reward coins is $240.

Her Schedule D shows a net short-term gain of $177 ($577 minus $400) and a long-term gain of $1,200. She checks "Yes" on the digital asset question. If any of these steps feel unclear, the free CCF Quick Start Guide walks through the core terms first.

Common mistakes that cause IRS letters

• Ignoring a 1099-DA. The IRS gets a copy. If the proceeds are not on your return, expect a matching notice.
• Reporting proceeds with zero basis. A blank basis on the form does not mean your basis is zero. It can make you overpay a lot.
• Treating swaps as non-events. Every crypto-for-crypto trade is a sale of the coin you gave up.
• Falling for scams. The IRS warns about fake letters with a QR code asking you to register crypto on a "compliance portal." The IRS does not require registration.

Your filing checklist

Use this before you file or before you meet your preparer.

• Every 1099-DA, 1099-MISC and 1099-NEC collected
• CSV histories from every exchange and wallet saved
• Transfers between your own accounts matched up
• Basis found for every sale, including coins moved in from elsewhere
• Each trade sorted into short-term or long-term
• Each trade assigned to box G, H, I, J, K or L
• Any wrong 1099-DA basis corrected with code B and proof saved
• Rewards and crypto pay reported as income at fair market value
• Digital asset question answered on Form 1040
• State return checked

The 2026 federal return is generally due April 15, 2027. An extension on Form 4868 gives more time to file, not more time to pay. If you use crypto tax software, check its output against your 1099-DA.

When to hire a tax professional

A few trades on one US exchange is often manageable on your own. Get help if you traded across several platforms, used decentralized apps, got paid in crypto for a business, think a 1099-DA is wrong or have past years you never reported. A CPA or enrolled agent who works with digital assets is worth it. The same goes if you hold tokenized stocks, which follow different rules.

Frequently asked questions

Do I have to report crypto if I didn't sell?

If you only bought crypto with dollars and held it, you answer "No" on the digital asset question and have no sale to report. If you swapped, spent or earned crypto, you have something to report even though you never cashed out to dollars.

What form do I use to report crypto on taxes?

Sales, swaps and spending go on Form 8949 and then Schedule D. Crypto income such as staking rewards usually goes on Schedule 1, or Schedule C if it is business income. Everyone also answers the digital asset question on Form 1040.

What is Form 1099-DA?

It is the form US crypto brokers use to report your digital asset sales to you and the IRS. It started with 2025 transactions. For 2026 transactions brokers must also report basis on certain trades, mostly coins bought on that same platform from 2026 on.

What if I didn't get a 1099-DA?

You still report every taxable transaction. Use your own records and check box I or L on Form 8949. Foreign exchanges and self-custody wallets often do not send one.

Which Form 8949 box do I check for crypto?

Use G, H or I for short-term trades and J, K or L for long-term trades. G and J are for forms that show basis reported to the IRS. H and K are for forms without reported basis. I and L are for trades with no 1099-DA. Do not use box C or F.

Can I deduct crypto losses?

Yes. Capital losses offset capital gains. If losses are larger, you can deduct up to $3,000 a year against other income ($1,500 if married filing separately) and carry the rest forward.

How are staking rewards reported?

Generally as ordinary income at fair market value when you gain control of the rewards, on Schedule 1 for most individuals. That value becomes your basis when you later sell them.

The bottom line

Reporting crypto on taxes comes down to four steps: answer the digital asset question, list each disposal on Form 8949 with the right box, carry the totals to Schedule D and report crypto income on Schedule 1 or Schedule C. Form 1099-DA helps but it does not replace your own records. If you want to learn how to invest and trade digital assets the simple way with AI on your side, explore our CCF programs.

This article is general education, not financial, tax or legal advice. Tax rules and forms are current as of November 12, 2026 and can change. Talk to a qualified tax professional about your own situation.

Written by

Joshua Montoya

CCF · Co-founder

Joshua Montoya is a bestselling author and speaker and an equal co-founder of CCF with Marty Cooney. His story is from fast food to freedom: he left fast food for a digital marketing career in 2010 and has been in crypto since 2017. His mission is the power of 1% and he teaches everyday people to buy, sell, trade and secure digital assets with risk management and independent decisions first.

Marty Cooney

CCF · Co-founder

Marty Cooney is a bestselling author and speaker and an equal co-founder of CCF with Joshua Montoya. His story is from digital publishing to digital assets: he built a career in online marketing and publishing and has been in crypto since 2017. His motto is show up daily and stack your 1% and he teaches everyday people to buy, sell, trade and secure digital assets with a clear process first.

Meet the founders