What forms do I use to report crypto assets on my taxes?

Depending on the type of crypto-related income you earned, you may have to fill out multiple forms, including Form 1040, Individual Income Tax Return.

1. How do I fill out Schedule D, Capital Gain and Losses?

This form is used to report the total capital gain or loss on all your assets, including cryptocurrency. Simply list the total amount sold (proceeds), the total bought (cost basis), and the total gain or loss. Depending on whether or not you held your crypto for longer than 1 year, you will report your gain or loss as either long-term or short-term. If your total is a loss, you can deduct up to $3,000 ($1,500 if married, filing separately) from your ordinary income. If you still have a remaining loss after your deduction, you can carry the loss to the next year. Likewise, you can also deduct last year’s remaining capital losses from this year’s income.

2. Form 8949 Sales and Other Dispositions of Capital Assets

This form requires more detailed information than Schedule D does. As mentioned above, you categorize your sold cryptocurrencies as short-term or long-term depending on the holding period. You also need to list the description, sell date, buy date, sell price, buy price, and gain or loss for each asset.

Cointelli provides a completed Schedule D and Form 8949 for you to include in your tax return.

3. Schedule 1, Additional Income and Adjustments to Income

You report other income such as crypto income from hard forks, airdrops, etc. on Schedule 1.

Foreign Currencies

1. FBAR, Report of Foreign Bank and Financial Accounts

According to FinCEN Notice 2020-2, cryptocurrency is not subject to reporting on FBAR. However, if your cryptocurrency is in a foreign account that holds other non-crypto assets, you may be required to report the account.

2. FATCA, Foreign Account Tax Compliance Act

The IRS has not yet provided clear guidelines on whether cryptocurrency is subject to reporting on FATCA Form 8938. However, since crypto is considered property, which is a type of asset, we encourage you to report your crypto to be safe, especially if your crypto is held on a foreign exchange or account.

 


 

DISCLAIMER: This post is for informational purposes only and should not be interpreted or relied upon as a substitute for the advice of financial, legal, or tax professionals. This content also only addresses U.S. federal income tax consequences for U.S. citizens and residents and does not address tax consequences that may be relevant to a particular person subject to special rules, such as dealers or traders. You should consult with your own financial, legal, or tax professionals to report and file your crypto taxes or make decisions on your particular circumstances. The laws, regulations, or interpretation of the existing laws could change, which may adversely affect either prospectively or retroactively. The content of this post is subject to changes.