Crypto Tax Reporting: What You Need to Know Before Filing

When you buy, sell, or trade crypto tax reporting, the process of tracking and declaring cryptocurrency transactions to tax authorities. Also known as cryptocurrency taxation, it's not just about Bitcoin—you need to report every swap, staking reward, airdrop, and NFT sale. The IRS treats crypto like property, not currency. That means every time you trade Ethereum for Solana, or cash out Bitcoin for dollars, you’ve triggered a taxable event. No exceptions. No loopholes. If you didn’t report it, the IRS already knows.

Most people miss the big picture: crypto income, earnings from staking, mining, or receiving payments in digital assets is taxed as ordinary income at the time you receive it. If you earned 0.5 ETH as a staking reward when it was worth $1,200, that’s $1,200 of taxable income—even if you never sold it. Then, if you later sell that ETH for $1,500, you owe capital gains on the $300 profit. This isn’t theoretical. In 2024, the IRS sent over 12,000 warning letters to crypto users who didn’t file correctly. IRS crypto rules, the official guidelines for reporting digital asset transactions are strict, and penalties start at $10,000 for willful non-compliance.

Tracking this manually is a nightmare. You need to log every transaction: date, amount, USD value at time of trade, and what you traded it for. That’s hundreds of entries for active traders. Tools like Koinly or CoinTracker help automate this, pulling data from wallets and exchanges. But even with tools, you still need to understand what you’re looking at. Did you just lose money on a trade? That’s a capital loss—and you can use it to offset gains. Did you send crypto to a friend as a gift? That’s not taxable for you, but they inherit your cost basis. These details matter.

And don’t assume your exchange sends you a 1099. Most don’t. Even Coinbase’s 1099-MA is incomplete—it only covers sales, not swaps or staking. If you used decentralized exchanges like Uniswap, you’re on your own. No middleman. No hand-holding. That’s why blockchain taxation, the broader practice of applying tax laws to decentralized ledger transactions requires you to be your own accountant.

What you’ll find below are real, practical guides from people who’ve been through it. From how to calculate gains on a weekend of trading to what happens if you forgot to report last year’s airdrop, these posts cut through the noise. No fluff. No theory. Just what you need to file right—and avoid getting hit with a bill you didn’t see coming.