How to report crypto to the IRS in 2026: Form 8949 & Schedule D step by step
Quick answer: Crypto sales are reported to the IRS on Form 8949 and summarized on Schedule D of Form 1040. Short-term gains (held under 1 year) are taxed as ordinary income (10%-37%); long-term gains at 0%-20%. Since tax year 2025, US exchanges issue Form 1099-DA directly to the IRS.
"I traded crypto on Coinbase and Kraken all year and have no idea how to fill out Form 8949. The IRS already got my 1099-DA and I'm afraid my numbers won't match."
Starting with tax year 2025, US digital-asset brokers must issue Form 1099-DA, reporting your sales directly to the IRS. The gray zone is gone: the IRS knows your proceeds before you file. If your return doesn't match the reported figures, you'll receive an automated CP2000 notice.
The US system splits capital gains into short-term (held 365 days or less, taxed as ordinary income up to 37%) and long-term (over one year, taxed at 0%, 15% or 20% depending on total income). That split can be worth thousands: selling a Bitcoin with a $30,000 gain at month 11 versus month 13 can change your tax bill by over $6,000.
Beyond sales, the IRS taxes staking rewards, airdrops and crypto payments received as ordinary income at fair market value on the day of receipt. The digital-asset question on page one of Form 1040 is mandatory — answering "No" falsely is perjury.
Step-by-step guide
- 1
Download your 1099-DA forms and full history
Every exchange where you sold will issue a Form 1099-DA (available in tax documents by January 31). Also export the full transaction CSV — including transfers between your own wallets — to reconstruct cost basis.
- 2
Compute cost basis per lot
From 2025, cost basis is tracked per wallet/account (Rev. Proc. 2024-28). You may use specific identification (Spec ID) if you document which lot you're selling before the sale; otherwise FIFO applies. Crypto tax software automates this.
- 3
Fill out Form 8949
Part I for short-term positions, Part II for long-term. Each line: description (e.g. 0.5 BTC), date acquired, date sold, proceeds, cost basis, gain/loss. If your 1099-DA reported basis to the IRS use Box A/D; otherwise Box B/E.
- 4
Summarize on Schedule D and answer the 1040 crypto question
Carry Form 8949 totals to Schedule D. Check "Yes" on the Form 1040 digital-assets question if you sold, swapped or received crypto. Staking rewards go on Schedule 1, line 8v as other income.
- 5
Harvest losses before December 31
Crypto losses offset gains without limit plus up to $3,000 of ordinary income per year (excess carries forward). As of 2026 the wash-sale rule still does not apply to crypto, so you can sell at a loss and immediately rebuy — verify current legislation each year.
Included calculator
Spanish crypto capital-gains simulator
IRPF 2025-2026 savings-base brackets. Enter your buy price, sell price and quantity.
Total sale
€90.000
Capital gain
€60.000
Estimated tax
€12.680
Bracket breakdown:
| Bracket (EUR) | Taxed | Rate | Tax |
|---|---|---|---|
| 0-6000 | €6000 | 19% | €1140 |
| 6000-50.000 | €44.000 | 21% | €9240 |
| 50.000-200.000 | €10.000 | 23% | €2300 |
Effective rate: 21.13% · Net after tax: €77.320
Estimate only — not tax advice. Assumes FIFO cost basis and full IRPF savings base. Regional variations may apply for Basque Country and Navarra.
Key takeaways
- The IRS receives your sales via Form 1099-DA from tax year 2025 — non-reporting is detected automatically.
- Holding over 12 months drops your rate from up to 37% down to 0-20% (long-term capital gains).
- Staking and airdrops are ordinary income at fair market value on the day received.
- Losses offset gains without limit + $3,000 of ordinary income per year.
- The Form 1040 digital-assets question is mandatory: lying is federal perjury.
Frequently asked questions
Does paying for something with Bitcoin trigger US taxes?
Yes. Using crypto to pay for goods or services is a disposition: gain or loss is computed between your cost basis and fair market value at the time of payment, and reported on Form 8949 like any sale.
What if I never received a 1099-DA?
You still must report. 1099-DA is only issued by US custodial brokers; sales on DEXs, self-custody wallets or foreign exchanges must be reconstructed manually from your on-chain history and reported on Form 8949 (Box B/E).
How are Ethereum or Solana staking rewards taxed?
As ordinary income at fair market value on the day you gain control of the rewards (see Jarrett v. United States as reference). That value becomes your cost basis for the eventual sale.
Can I deduct gas and trading fees?
Yes: acquisition fees are added to cost basis and selling fees are subtracted from proceeds — both reduce the taxable gain. Fees for transfers between your own wallets are not deductible.
Simulate the tax impact of your sales with the CryptoOráculo calculator before executing them: the difference between selling at month 11 vs month 13 after purchase can cut your bill by thousands of dollars.
Calculate your taxable gain