Reviewed and updated October 16, 2026
Identify taxable events
Selling cryptocurrency, exchanging one token for another and spending digital assets can create a taxable disposition. Receiving digital assets for services generally creates income measured under the applicable valuation rules. Mining, staking and other rewards require their own timing and reporting analysis.
Simply buying and holding an asset is different from selling it. Moving assets between wallets you own generally is not itself a sale, but you need records linking the transfer so software does not mistake it for income or a disposal.
Reconstruct basis and proceeds
For each relevant transaction, retain dates, units, dollar values, fees, acquisition history and wallet or exchange identifiers. Basis may not travel automatically with a transfer between platforms. A reporting form with missing basis does not mean your basis is zero, but you must substantiate the correct amount.
Reconcile exchange exports with wallet activity and your bank records. Do not rely only on annual net deposits. Sales proceeds and taxable gain are different figures, and different activities can belong on different parts of the return.
Prepare a complete filing package
Provide all exchange accounts, wallet records, reward statements and prior-year loss information to your preparer. Explain gifts, transfers and inaccessible accounts separately. Answer the return’s digital-asset question according to its current instructions.
New information reporting does not remove your responsibility to report the actual transactions accurately. Review unmatched transfers and duplicate entries before accepting software totals. This article addresses tax records and reporting, not whether a particular asset is an appropriate investment.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
