Short answer
US crypto tax compliance is complex but tractable. The IRS treats crypto as property (Notice 2014-21). Every sale, swap, NFT trade, payment, and most receipts are taxable events. Form 8949 reports each transaction; Schedule D summarizes; Form 1040 has a yes/no checkbox about crypto activity. Use a tax-tracking tool (Koinly, CoinTracker, TokenTax) — manual tracking is impractical for anyone who's done more than a dozen transactions. The IRS has been aggressive about crypto enforcement since 2023, and penalties for non-reporting are substantial.
What's taxable
Selling for USD. Capital gain or loss based on cost basis vs sale price.
Trading crypto for crypto. Each swap is a taxable event. Trading BTC for ETH is two transactions: sell BTC (gain/loss), buy ETH (new cost basis).
Receiving airdrops. Ordinary income at fair market value on receipt. The received tokens become your new cost basis.
Staking rewards. Ordinary income when received. Rev. Rul. 2023-14 clarifies the receipt-at-control rule.
Mining income. Ordinary income at fair market value when mined.
NFT sales. Capital gain or loss like any other property.
Paying for goods with crypto. Sale at fair market value, capital gain/loss event.
What's not taxable
Buying crypto with USD. Establishes cost basis; no immediate tax.
Transferring crypto between your own wallets. Not a sale; no tax event. But keep records to prove the transfer was between your own addresses.
Gifting crypto. Gift tax may apply for amounts above the annual gift exclusion ($18K in 2024 per recipient), but no income tax event.
The reporting forms
Form 8949. List each capital-gain transaction. For 50+ transactions, this becomes impractical without software.
Schedule D. Summarizes Form 8949 totals.
Schedule 1. Reports ordinary income (airdrops, staking).
Form 1040. The "Did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?" question must be answered yes/no. Answer truthfully — perjury risk if you answer no when you did.
Schedule B / FBAR / Form 8938. For crypto held on foreign exchanges, may require additional reporting if balances exceed thresholds.
The 2025 broker reporting rule
IRS Form 1099-DA, mandated by the 2021 Infrastructure Act, requires US crypto exchanges to report customer transactions starting 2025 tax year. Coinbase, Kraken, Gemini, Binance.US all comply. This means the IRS sees your trading activity on these exchanges — they know what you traded, even if you don't report.
For 2026 tax filing (for 2025 activity), exchanges have already submitted 1099-DA forms. Your tax software (Koinly, etc.) imports these directly.
The professional help threshold
If you had more than 100 transactions in the tax year, complex DeFi positions, NFT activity, or any cross-border concern: hire a crypto-aware CPA. Major firms include CryptoTaxPro, Camuso CPA, Polygon Advisory Group. Cost: $500-3,000 depending on complexity. Worth it; the penalties for getting this wrong dwarf the fee.