1099-b Crypto Taxes: Reporting & Compliance Tips

This introduction outlines when digital asset disposals trigger U.S. tax reporting and which forms you’ll use for a complete, accurate return.

The IRS treats cryptocurrency as property, so disposals go on Form 8949 and subtotals flow to Schedule D. Totals then move to Form 1040, line 7, where your tax return shows gains and losses.

Sales, swaps, and spending are taxable events; purchases and simple holding are not. Your basis, proceeds, and fees determine the gain loss amount on each transaction.

Platforms may send a range of forms: a form for proceeds and others like 1099-MISC or 1099-NEC for ordinary income such as staking or mining. Even without forms, investors must still report accurate information.

Expect reporting changes heading into the 2025 tax year as digital assets shift toward expanded forms and new rules. Good records across wallets and exchanges reduce mismatch risk and help with compliance.

Understanding 1099-B for Cryptocurrency: What It Is and Why It Matters

A broker form summarizes what you received and what you paid when an asset is sold.

How the form reports disposals: The document usually lists gross proceeds, cost basis, and the calculated gain or loss for each sale. For cryptocurrency transactions, proceeds come from the sale price or fair market value at disposal.

Cost basis reflects your original purchase amount plus fees. The difference between proceeds and basis determines capital gains or losses reported on your return.

• Traditional brokers routinely issue these forms with complete basis data.
• Many exchanges issue forms selectively, so data gaps are common.
• Multiple wallets and internal transfers make basis tracking harder for digital assets.

Practical note: A form from an exchange helps with reporting but is not attached to your return. You must reconcile every platform, fill Form 8949 and Schedule D where required, and report all amounts even if no form arrives.

IRS View of Crypto: Property Rules and Taxable Events

For federal purposes, virtual currencies are treated like assets such as stocks, which means disposals can trigger capital outcomes.

What the IRS expects: Selling, swapping, or spending a digital asset creates capital results. Each disposal can produce gains or losses that affect your return.

• Taxable disposals: Sales for cash, trading one token for another, and using cryptocurrency to buy goods or services all create reportable events.
• Ordinary income: Mining rewards, staking payouts, airdrops, and wages paid in crypto are treated as ordinary income when received.
• Non-taxable actions: Buying and holding an asset without disposing does not create a taxable event, even if the amount invested rises in value.

Track dates, proceeds, cost basis, and fees for every transaction. Your holding period at disposal determines short-term versus long-term capital treatment.

Important: Report all transactions on your return, even if you did not receive any forms from platforms. Accurate records protect you in case the IRS requests additional information.

The 2025 Landscape: Forms, Rates, and the Shift to Digital Asset Reporting

Heading into the 2025 tax year, reporting and rate changes make planning and record checks essential.

Short-term capital gains remain taxed at ordinary income rates up to 37%, while long-term gains use preferential brackets of 0%, 15%, or 20% depending on income and filing status.

Rates and planning

That split means holding period matters. Consider longer holds to access the lower capital gains rates when possible.

From form 1099-b to a new digital asset form

Brokers and platforms will shift from the old form 1099-b to a dedicated 1099-DA for digital assets. This change broadens reporting to the IRS and to taxpayers.

Platforms may now include more complete proceeds and basis information, but you must still verify each amount. Transfers between exchanges can leave basis gaps that need reconciliation.

Bottom line: expect earlier, fuller information in 2025. Better forms reduce mismatches and support IRS compliance, but accurate records remain your responsibility.

1099-b crypto taxes: What to Expect From Exchanges and Brokers

Forms you get at year-end depend on whether you sold assets, earned rewards, or received nonemployee compensation.

Common form types:

• Form 1099-B: issued for disposals and sales of assets by some brokers and exchanges.
• Form 1099-MISC: used for rewards or staking income reported as other income.
• Form 1099-NEC: for mining or nonemployee compensation generally reported when payments meet the $600 threshold.

The IRS also receives copies of these forms, so reconcile platform information to avoid CP mismatch notices for the year.

Not every platform issues every form. Some exchanges issued 1099-B in 2023—examples include Cash App, Robinhood, Uphold, and Crypto.com (contract trading). When proceeds or basis are incomplete, you must supply basis from your own records.

Checklist to file cleanly: reconcile totals across brokers and exchanges, confirm proceeds, capture wallet addresses and transfer history, and document basis for each transaction.

Your How-To Roadmap: Reporting Crypto Disposals on Form 8949

A clean Form 8949 starts with one line per disposal: description, acquisition and sale dates, proceeds, and cost basis. Complete each line so the calculated gain or loss is clear.

Separating short-term and long-term transactions

Group disposals by holding period. Short-term items go in one section and long-term items in another. This separation matters because rates differ and Schedule D requires subtotals by category.

Entering descriptions, dates, proceeds, and cost basis

List the asset description, acquisition date, sale date, gross proceeds, and basis for each line. Include transaction fees in basis or proceeds so the net amount reflects reality.

Adjustments and codes when basis is missing or incorrect

When a form shows missing or zero basis due to transfers, use the IRS adjustment codes and enter an amount in the adjustment column to correct the gain or loss.

• Step-by-step: list each disposal, confirm dates and amounts, and record fees in basis or proceeds.
• Subtotal: total short-term and long-term sections separately, then transfer subtotals to Schedule D for reconciliation.
• Filing note: attach any allowed summaries and ensure all numbers tie to other forms on your return.

Keep supporting information: save trade histories, exchange statements, wallet records, and cost documentation. Retained records substantiate adjustments if the IRS requests more information. For more guidance, see this detailed reporting guide.

Reconciling to Schedule D and Form 1040

Begin with per-category subtotals on Form 8949 to build a clear net-capital picture.

Transfer subtotals by moving short-term and long-term totals from Form 8949 into the corresponding lines on Schedule D. Enter each subtotal so the schedule shows total gains, losses, and any adjustments by category.

Where totals flow on your return

Schedule D’s net result then flows to Form 1040. The combined capital gain or loss appears on line 7 of Form 1040 and affects your overall tax liability on the return.

Adjustments, checks, and common pitfalls

Basis adjustments on Form 8949 change the subtotal carried to Schedule D. Make sure adjustments are documented so totals reconcile cleanly.

• Verify names, dates, and amounts match across all forms and statements.
• Confirm short-term and long-term totals balance and net to the same amount shown on Schedule D.
• Avoid double-counting disposals or omitting transactions from platforms that did not issue forms.

For procedural details and filing guidance, consult the official Schedule D and Form 1040 instructions.

Calculating Capital Gains and Losses the Right Way

Work through each transaction one at a time to determine the precise gain or loss for the year. Clear records make every calculation faster and more defensible.

Determining cost basis and sale proceeds

Cost basis usually equals your purchase price plus fees and commissions. Include transfer fees and any acquisition costs when you compute the basis.

Proceeds are the gross sale amount minus selling fees and commissions. The net proceeds set the amount you compare to basis to find the gain or loss.

Applying holding periods and netting gains losses

Holding period under one year is short-term; over one year is long-term. Short-term items use ordinary tax rates, while long-term items use preferential rates (0%, 15%, 20% in 2025).

• Net gains and losses within short-term and long-term buckets.
• Then net the two results against each other to get the year’s overall gain or loss.
• Unused capital losses can offset up to $3,000 of ordinary income and carry forward to future years.

Record each line on Form 8949, subtotal by category, and move totals to Schedule D. That flow supports accurate filing and shows the final gain loss for the year.

Ordinary Income from Crypto: Mining, Staking, Airdrops, and Payments

When you receive tokens from mining, staking, an airdrop, or as payment, the fair market value at receipt counts as ordinary income.

Which schedules and forms apply? If the activity is part of a business or self-employment, report it on Schedule C. Net profit above $400 triggers Schedule SE for self‑employment tax. Other miscellaneous receipts go on Schedule 1 as additional income.

Platforms may issue 1099‑NEC or 1099‑MISC reflecting that income. Even without a form, you must include the amount based on FMV at the time you received the asset.

Self‑employment tax is calculated on net profit from Schedule C. Half of that tax is deductible on Schedule 1 and the SE liability flows through to Form 1040 via Schedule 2.

Later sales or spending of the same assets create separate capital gains or losses based on proceeds versus your basis (the FMV you recognized when received).

• Income types: mining, staking, airdrops, and payments are ordinary income at receipt.
• Forms/schedules: Schedule C, Schedule SE, Schedule 1, and the applicable 1099 forms may apply.
• FMV timing: use market value on the receipt date; track that basis for later gain/loss calculations.

For a concise list of events that create reportable income, see this taxable events guide.

Common Transaction Scenarios You Must Report

Everyday moves with digital assets can create reportable events. Below are the typical scenarios that trigger reporting and how to handle them on your return.

Spending digital assets on goods and services

Using a token to buy items is a disposal. You must calculate proceeds in USD and compare them to your basis.

Report each event on form 8949 with the correct dates, proceeds, and basis so the gain or loss is clear.

Trading one asset for another

Swapping coins or tokens counts as a taxable sale. Use the USD value at the time of the exchange to measure proceeds.

Record both sides of the transaction and include the amount on the appropriate schedule for the year.

Gifts and charitable contributions

Gifts do not create immediate tax for the donor; the recipient inherits the donor’s basis for future disposals.

Donating to a qualified charity may allow a deduction at fair market value and typically avoids capital gains recognition on the donation.

• Example: If you bought a token for $100 and spent it when worth $300, report a $200 gain on form 8949.
• Keep clear records across exchanges and wallets to avoid mismatch notices and to calculate gains and losses accurately.

Crypto in Tax-Advantaged Accounts: When Transactions Aren’t Taxable

Holding digital assets inside a retirement account usually shields trades from immediate federal tax consequences.

Trades within IRAs and Roth IRAs generally avoid current taxation. That means disposals inside these accounts do not appear on Form 8949 or Schedule D for your individual return.

With a Traditional IRA, tax occurs when you take distributions. Withdrawals count as ordinary income in the tax year you receive them.

By contrast, qualified Roth IRA distributions can be tax-free in a future tax year. That makes Roths a strategic choice if you expect higher capital gains later.

Remember the reporting contrast: taxable brokerage accounts require per-transaction reporting and flow to form 1040, while retirement accounts defer or eliminate that burden at the time of trade.

• Select account type with capital outcomes in mind to manage future gains and losses.
• Avoid prohibited transactions and confirm custodial rules before moving assets into a retirement account.
• Keep custodial information and account statements as supportive information for any future inquiries.

Practical tip: consult your custodian on allowable holdings and on record formats so your retirement transactions remain compliant and properly sheltered from immediate tax reporting.

No 1099-B? How to Report Crypto Transactions Anyway

When an exchange doesn’t send year-end forms, your records must stand in for missing brokerage paperwork.

Start by exporting every trade, deposit and withdrawal from exchanges and pulling wallet histories. Many platforms let you download CSV or JSON files. Keep raw files and a consolidated spreadsheet with one line per transaction.

• Standardize timestamps and convert each entry to USD at the exact time of the trade.
• Compute cost basis per disposal (purchase price plus fees) and record proceeds as the USD received.
• Use reputable tax software to aggregate data across wallets and reduce manual errors when calculating gains losses and capital gains losses.

Enter each disposal on Form 8949, group short‑ and long‑term items, then carry subtotals to Schedule D for final filing. If allowed, attach a clear summary and retain all source information.

Bottom line: you must report accurately even without a form 1099-b. Good records, consistent USD conversions, and reliable tools make filing defensible and complete.

When 1099-B Data Is Incomplete or Inaccurate

Missing or zero basis entries often show up after assets move between platforms. An exchange may report $0 or “n/a” for cost when transfers obscure the original purchase record. That gap can exaggerate the reported capital gains amount if you rely on the raw form.

Why transfers create blank basis fields

Transfers between exchanges or into private wallets commonly drop basis details. Platforms focus on proceeds at disposal and may not carry historical purchase data across chains or accounts.

Reconstructing and documenting original basis

Rebuild basis from your own records. Pull purchase receipts, prior exchange statements, and wallet histories to compute the original cost basis. Include fees, commissions, and transfer costs so the basis reflects the true amount.

Reconciliation workflow and support

Align your transaction ledger with the form, flag discrepancies, then correct basis on Form 8949 using adjustment codes as needed. Keep a clear workpaper showing your math and sources for each correction.

• Match dates and amounts across exports and platform forms.
• Record TXIDs, timestamps, and USD values to validate transfers.
• Save all corrected workpapers and supporting files in case the IRS requests substantiation.

Note: The upcoming shift to new reporting forms will improve data flow but will not remove every basis gap. Investor diligence remains essential to avoid overstated gains and to support any future inquiries.

Record-Keeping Essentials and IRS Compliance

Documenting every movement between wallets and exchanges prevents mismatches with IRS data.

What to track: keep acquisition and disposal dates, USD amounts, fair market value at receipt, fees, wallet addresses, and full exchange statements for each transaction.

Store transaction IDs, timestamps, and the method used to convert values to USD. Save CSV exports and screenshots so you can prove the amount and the cost for each line on your return.

How the IRS can trace activity

The IRS matches form information to returns and uses blockchain analytics to link addresses and transactions. That makes accurate reporting critical to avoid notices and audits.

Practical compliance steps

• Answer the Form 1040 virtual currency question honestly and ensure totals on your return reflect your records.
• Reconcile exchange reports, wallet histories, and any forms before filing to avoid mismatches.
• Archive year-by-year records so you can quickly produce information if the IRS requests details.

Bottom line: clear records reduce errors in gains and losses and make future reporting faster and more defensible.

Crypto Exchanges, Wallets, and Reporting: Practical Considerations

Platform differences matter. Centralized exchanges, wallets, and decentralized exchanges (DEXs) create different outputs that shape your reporting work. Some centralized services issued forms for 2023 (Cash App, Robinhood, Uphold, Crypto.com contract trading), while many platforms did not.

What varies: centralized exchanges often provide year‑end summaries and downloadable CSVs. Wallets and DEXs rarely issue forms and may only offer raw transaction histories. That variability affects basis tracking and forces you to supply missing basis information from your own records.

Practical steps to close gaps

Keep a unified transaction ledger that combines exports from brokers, exchanges, and wallets. A single consolidated file makes it easier to compute cost basis and to calculate capital gains and losses on your schedule.

• Pull annual reports early in the year to resolve gaps before filing.
• Reconstruct basis for transfers and note fees so gains and losses are accurate.
• Expect broader reporting as 1099-DA rolls out, but verify every line yourself.

Bottom line: align exchange and wallet histories now. Early retrieval and a consolidated ledger reduce errors and speed accurate reporting of gains and losses on your return.

Step-by-Step Example: From Transaction History to Filed Return

Start by consolidating all exchange CSVs and wallet logs into one dated ledger. This single file becomes your source of truth for every transaction and income item for the year.

Compiling trades and income

Export trades, deposits, withdrawals, and income statements from each platform. Standardize timestamps and convert values to USD at each event.

Separate ordinary income (mining, staking, rewards, 1099‑MISC/1099‑NEC items) from capital disposals. Route income to Schedule 1 or Schedule C as appropriate.

Preparing Form 8949 and Schedule D with a real-world example

Enter every disposal on form 8949: asset, dates, proceeds, and cost basis. Include fees when computing the net gain or loss. Subtotal short‑term and long‑term items and carry them to Schedule D, then to Form 1040.

Filing flow: enter lines on form 8949, subtotal by holding period on Schedule D, then transfer the net to Form 1040. Verify ordinary income items appear on their proper schedules so the return shows the full amount and category of each item.

Conclusion

A complete, defensible return starts with consolidating records and verifying each reported event.

Gather acquisition and disposal information, compute basis and proceeds, complete Form 8949 and Schedule D, and then finalize your return. Even if platforms did not send forms, you must still report all activity and keep supporting documents.

Report ordinary income items on the proper schedules and report capital disposals on Form 8949/Schedule D so the return is accurate and auditable.

Stay organized, file on time, and update processes each year as reporting rules expand. For business-focused guidance on digital asset reporting, see this crypto tax reporting for businesses.