Crypto Tax Forms Explained: 8949, Schedule D & Schedule 1
Crypto tax forms explained: use Form 8949 and Schedule D for gains, Schedule 1 for earned crypto, and reconcile the new 1099-DA.
The main crypto tax forms are Form 8949 and Schedule D for reporting capital gains and losses when you sell, swap, or spend crypto, and Schedule 1 (or Schedule C) for reporting crypto you earned as income. In 2025 a new information return, Form 1099-DA, also started arriving from exchanges.
The IRS treats cryptocurrency as property, not currency. That single rule drives which form you use: disposing of property triggers a capital gain or loss, while receiving crypto in exchange for work or as a reward is ordinary income. Here is how each form fits together.
Form 8949: report every disposal
Form 8949 is where you list each taxable disposal of crypto. A disposal happens any time you part with a coin, not just when you cash out to dollars. Taxable events include:
- Selling crypto for USD
- Trading one crypto for another (for example, ETH for SOL)
- Spending crypto on goods or services
- Using crypto to pay a fee
For each disposal you report a description of the asset, the date acquired, the date sold, the proceeds, and your cost basis. The difference is your gain or loss. Transactions are split by holding period: assets held one year or less are short-term (taxed at ordinary rates), and assets held longer than one year are long-term (taxed at lower capital-gains rates). Form 8949 has separate sections for each.
Starting with the 2025 tax year, cost basis must be tracked per wallet or account rather than pooled across all of your holdings. That change makes accurate records more important than ever, especially if you move assets between wallets and exchanges.
Schedule D: the capital gains summary
Schedule D summarizes the totals you calculated on Form 8949. It nets your short-term results together, nets your long-term results together, and combines them into a single net capital gain or loss that flows onto your Form 1040. If your losses exceed your gains, you can deduct up to $3,000 of net capital loss against other income per year and carry the rest forward.
Think of the relationship this way: Form 8949 shows the line-by-line detail, and Schedule D rolls it up.
| Form | What it reports | Type of income |
|---|---|---|
| Form 8949 | Each individual crypto disposal | Capital gain/loss detail |
| Schedule D | Net capital gain or loss | Capital gain/loss summary |
| Schedule 1 | Staking, rewards, airdrops, other income | Ordinary income |
| Schedule C | Crypto earned in a trade or business | Self-employment income |
Schedule 1: crypto you earned as income
When you receive crypto rather than buy it, the fair market value at the time you receive it is ordinary income. Common examples include staking rewards, airdrops, referral bonuses, and interest-style rewards. Most people report this as "other income" on Schedule 1.
There is a key follow-on effect: the amount you report as income becomes your cost basis in those coins. When you later sell them, you calculate the capital gain or loss from that basis on Form 8949, so the same coins can touch two different forms across their lifetime.
If you earn crypto as an independent contractor or run a mining or trading business, that income generally belongs on Schedule C and may be subject to self-employment tax. See our tax strategy hub for planning approaches.
Form 1099-DA: what your exchange sends
Form 1099-DA is a new information return for digital asset brokers that began with the 2025 tax year. It is not a form you fill out; your exchange sends it to you and to the IRS to report your gross proceeds from sales. You use it to help complete Form 8949, much like a stock 1099-B.
Two cautions. First, a 1099-DA may report proceeds without complete cost basis, especially for assets transferred in from another platform, so the numbers may not tell the whole story. Second, you must still report disposals even if you never received a 1099-DA. Always reconcile the form against your own records. For platform-specific guidance, see our Coinbase tax documents guide and the full exchange guides hub.
The digital asset question
Near the top of Form 1040 there is a yes/no question asking whether you received, sold, exchanged, or otherwise disposed of a digital asset during the year. Answer it honestly on every return, even if you only held crypto without selling. Simply buying and holding is not a taxable event, but the question still applies. For the fundamentals, revisit the crypto tax basics hub.
Let Glide do the math
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Calculate my crypto taxes →This article is general information, not tax advice. Consult a qualified professional about your specific situation.