Crypto tax compliance and planning
Your crypto is on a ledger. Your basis should be too.
Brokers now report your crypto sales to the IRS on Form 1099-DA. The proceeds side is handled for you. The basis side, the lot choices and the income from staking and DeFi are still on you. These guides explain the rules plainly, with the regulation or IRS guidance behind each one.
Quick reference
- Gross proceeds on Form 1099-DA
- Sales on or after Jan. 1, 2025
- Broker basis reporting
- Covered assets acquired on or after Jan. 1, 2026
- Default lot method
- First in, first out, per wallet
- Capital loss offset vs. ordinary income
- $3,000 a year ($1,500 MFS)
Sources: Treas. Reg. 1.6045-1, 1.1012-1(j); IRC 1211(b).
How a clean crypto return gets built
Four steps, in this order
- 01
Inventory every wallet
Exchanges, hardware wallets, browser wallets, DeFi positions. Basis is now tracked wallet by wallet, so the map comes first.
- 02
Pin down basis and lots
Specific identification or first in, first out. Fees, transfers and income lots all feed the number the IRS will compare against Form 1099-DA.
- 03
Report it in the right place
Form 8949 and Schedule D for dispositions, ordinary income for staking and rewards, and the digital asset question answered correctly.
- 04
Fix what is already filed
Missed a year or a loss? An amended return filed on your schedule beats a correction filed on the IRS schedule.
Start here
The guides most people need first
Cost Basis & Records
Crypto Cost Basis Methods: FIFO, Specific Identification and What the Rules Actually Allow
FIFO is the default and specific identification is the choice. How crypto cost basis methods work under Treas. Reg. 1.1012-1(j) from 2025 on.
Reporting & Transactions
Form 1099-DA Explained: What Your Broker Reports and How to Reconcile It
Form 1099-DA reports crypto gross proceeds for 2025 sales and basis for some 2026 sales. What it shows, what it leaves out, and how to match it on Form 8949.
Cost Basis & Records
Wallet-by-Wallet Cost Basis and Rev. Proc. 2024-28: The 2025 Transition Explained
Since Jan. 1, 2025, crypto basis is tracked per wallet. How the Rev. Proc. 2024-28 safe harbor assigned old basis, its deadlines, and what if you missed them.
Fixing Past Years
Amending a Tax Return to Report Crypto: A Step-by-Step Guide to Form 1040-X
Left crypto off a filed return? How to amend with Form 1040-X: forms to attach, fixing the digital asset answer, interest, timing, and when to get advice.
DeFi, Staking & NFTs
Liquid Staking Tokens and Taxes: What Rev. Rul. 2023-14 Answers and What It Does Not
Staking rewards are income when you control them under Rev. Rul. 2023-14. Liquid staking tokens raise open questions. How to take a defensible position.
Cost Basis & Records
Crypto Record-Keeping: What to Keep, How Long to Keep It, and Why It Decides Your Basis
The records the IRS expects for crypto: dates, basis, values and wallet-level history. What to keep, how long, and how records control your lot choices.
Browse by topic
Find your question
- Cost Basis & RecordsLots, methods, wallets, fees and the records that prove them.
- DeFi, Staking & NFTsValidator rewards, liquidity pools, liquid staking and collectibles.
- Reporting & TransactionsWhat is taxable, where it goes on the return, and what brokers report.
- Fixing Past YearsAmended returns, missed losses and cleaning up prior years.
- Planning & Special SituationsRates, harvesting, gifts, charity, family and futures.
New this month
Recently added
- Specific Identification of Crypto Lots: Standing Orders and the 2025 and 2026 ReliefHow to specifically identify crypto lots in exchanges and self-custody wallets, why standing orders matter, and the IRS relief through Dec. 31, 2026.
- Gas Fees and Crypto Transaction Costs: How the 2025 Regulations Treat ThemWhere crypto fees go on your return: added to basis on purchases, subtracted from proceeds on sales and swaps, and why paying a fee in crypto is itself a sale.
- Covered vs. Noncovered Digital Assets: Why Your Crypto Basis May Not Be ReportedOnly covered digital assets get basis reported on Form 1099-DA. Which crypto is covered, why transfers into an exchange are not, and how to report the rest.
- The Digital Asset Question on Form 1040: How to Answer It CorrectlyYes or no on the Form 1040 digital asset question? What counts as receiving or disposing of crypto, when holding or self-transfers allow No, and the fee trap.
- Transferring Crypto Between Your Own Wallets: Not Taxable, But Not NothingMoving crypto between wallets you own is not a sale, but the fee can be, basis must move with the coins, and Form 1099-DA can make a transfer look like a sale.
- Where to Report Crypto on Your Tax Return: A Line-by-Line MapSales go on Form 8949 and Schedule D. Staking and other crypto income go on Schedule 1 or Schedule C. Wages, gifts, donations and thefts have their own forms.
Written by an attorney who has practiced tax law since 1993
Darrin T. Mish is a member of The Florida Bar (admitted 1993) and is also admitted in Colorado and Texas, to the United States Tax Court and to the Supreme Court of the United States. More about the author.
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