Crypto tax glossary
Plain-English definitions, each linked to a source.
- Digital asset
- Any digital representation of value recorded on a cryptographically secured distributed ledger (blockchain). Treated as property for U.S. tax. Source
- Broker
- For 1099-DA, a business that takes possession of the assets it sells for customers, like a custodial exchange. Source
- Form 1099-DA
- "Digital Asset Proceeds from Broker Transactions" — the form a broker files to report your sales. Source
- Proceeds
- What you received when you sold or exchanged an asset. Source
- Cost basis (box 1g)
- Generally what the asset cost you in U.S. dollars. Box 1g on Form 1099-DA. Source
- Capital gain / loss
- Proceeds minus basis on a capital asset you sold or exchanged. Source
- Short term / long term
- Held one year or less vs. more than one year before disposal. Source
- Covered security
- For 1099-DA, generally a digital asset acquired on or after Jan 1, 2026 in your account with the broker and held there. Brokers must report its basis. Source
- Noncovered (box 9)
- Assets that aren't covered; basis reporting is optional and box 9 is checked. Source
- Taxable event
- A sale, exchange, or other disposal (or receipt as income) that you must report. Source
- Form 8949
- The IRS form where you list each sale and its gain or loss. Source
- Schedule D
- Summarizes capital gains and losses from Form 8949. Source
- Fair market value
- The value in U.S. dollars at the time of a transaction. Source
- Stablecoin
- A digital asset designed to track a currency; brokers may report some sales on an aggregate basis. Source
- UTC
- Coordinated Universal Time. Some exchanges, such as Kraken, date trades in UTC, which can shift dates near midnight. Source