Essential guidance for reporting cryptocurrency transactions on your taxes.
Transaction Types
- Trading Activities
- Crypto-to-crypto exchanges
- Crypto-to-fiat conversions
- DeFi transactions
- NFT trading
- Income Activities
- Mining rewards
- Staking income
- Interest earned
- Airdrops
Tax Treatment
Capital Gains/Losses
- Short-term: Held < 1 year
- Long-term: Held > 1 year
- Cost basis tracking
- FIFO/LIFO considerations
Mining Income
- Equipment depreciation
- Electricity costs
- Facility expenses
- Pool fees
Reporting Requirements
Required Forms:
- Schedule D (Capital Gains)
- Form 8949 (Transactions)
- Schedule C (Mining Income)
- FinCEN Form 114 (if applicable)
Keep detailed transaction logs for all crypto activity
Key Points:
Cryptocurrency tax classification
Capital gains calculation methods
Mining income taxation
Reporting requirements for crypto transactions
Understanding crypto taxation for businesses
FAQ
01
How are crypto gains taxed?
Cryptocurrency gains are typically taxed as capital gains, with rates depending on holding period.
02
Do I need to report all crypto transactions?
Yes, all cryptocurrency transactions, including trades between different cryptocurrencies, must be reported.
03
How is mining income taxed?
Mining income is generally taxed as self-employment income if done as a business, or as hobby income if not.
