New to crypto taxes? Start here — plain-English guide

1. Crypto is treated as property

For U.S. tax purposes, digital assets (like Bitcoin, stablecoins, and NFTs) are considered property, not currency. That means the same basic rules as selling stocks apply: when you get rid of crypto, you may have a gain or a loss. Source: IRS: Digital assets

2. What's a taxable event?

The IRS lists these as digital asset transactions you need to report:

Usually reportable

Selling crypto for dollars
Trading one crypto for another
Paying for goods or services with crypto
Paying a transfer fee with crypto
Receiving crypto as payment, a reward, or from mining or staking (this is income)

Not a transaction on its own

Buying crypto with dollars and holding it
Just holding crypto in a wallet
Moving crypto between wallets or accounts you own (unless you paid the fee in crypto)

You must report digital asset transactions whether or not they result in a gain or a loss. Source: IRS: Digital assets

3. Cost basis: what you paid

Your basis is generally your cost in U.S. dollars. Your gain or loss is roughly what you got for it (proceeds) minus your basis. To figure basis you need the asset, the date and time you got it, how many units, and its fair market value in dollars at the time. Sources: IRS: Digital assets, Publication 551, Basis of Assets

Illustration only (made-up numbers): you buy a coin for $100 and later sell it for $150. Proceeds $150 − basis $100 = $50 gain. If your form shows no basis, the gain isn't $150 — you use your own records for the $100.

4. Short term vs long term

Short term: you held it one year or less before selling.
Long term: you held it more than one year.

They're taxed differently, so the holding period matters. Sources: IRS: Digital assets, Topic 409, Capital gains and losses, Publication 544

5. What the 1099-DA is, and why 2026 is different

Form 1099-DA is the form brokers (such as custodial exchanges) use to report your digital asset sales and exchanges to you and the IRS. Source: About Form 1099-DA

Sales in 2025: brokers report gross proceeds (what you sold for). Basis reporting wasn't required.
Sales on or after Jan 1, 2026: brokers must also report basis — but only for "covered" assets, generally those bought on or after Jan 1, 2026 in that same account and kept there.

So for coins you bought before 2026 or moved in from another wallet, the basis box may still be blank. Sources: IRS: Digital assets, 2025 Instructions, 2026 Instructions for Form 1099-DA More: Covered vs noncovered.

6. What to do with your form

Keep your records. The IRS expects records of each purchase, receipt, sale, and exchange. (IRS)
Compare the form with your records. That's what our free checker does.
Fill in missing basis from your records when the form leaves it blank.
Report sales on Form 8949, which flows to Schedule D. (About Form 8949)
Answer the digital asset question on Form 1040 ("Yes" if you sold, exchanged, or received crypto). (IRS)
If the form looks wrong, ask your broker about a corrected form and keep documentation. Consider a tax professional.

Lots of trades or wallets? See whether tax software is worth it. Unsure about a term? Glossary. Deeper detail: IRS FAQs on virtual currency transactions.

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