US federal cryptocurrency REPORTING & disclosure — Form 1040 digital-asset question, Form 8949 + Schedule D, Schedule C/Schedule 1, Form 1099-DA broker reporting (IRC §6045) phase-in, §6050I/Form 8300, FBAR (FinCEN Form 114), FATCA Form 8938, charitable-donation qualified appraisal (Form 8283), gift reporting (Form 709), and recordkeeping. Substantive treatment, income recognition, and NFTs are in sibling skills.
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Answer the digital-asset question
Mandatory Yes/No on the return; never leave it blank.
2025 i1040 (General Instructions)
Determine Yes vs No
'Yes' if received (pay/reward/mining/staking/fork) or disposed; 'No' if only held, bought with cash, or moved between own wallets.
Classify each event
Capital disposition vs ordinary income; separate business from non-business.
Report ordinary income
Non-business receipts on Schedule 1 line 8v/8z; trade-or-business on Schedule C + SE.
Report dispositions (8949 → Schedule D)
Each disposition listed separately, totalled to Schedule D.
Use the digital-asset 8949 boxes
Short/long-term boxes keyed to whether a 1099-DA was received and basis reported.
2025 i8949
Fix cost-basis method
Specific ID needs contemporaneous records else FIFO; wallet-by-wallet per-account basis required from 1/1/2025.
Watch for: Universal/average basis is no longer allowed, track wallet-by-wallet from 2025.
Rev. Proc. 2024-28; Treas. Reg. §1.1012-1(j)
Reconcile the 1099-DA phase-in
Custodial brokers report gross proceeds only for 2025 sales; basis reporting starts for 2026 acquisitions.
Watch for: Don't trust a 2025 1099-DA's basis, it isn't there yet.
IRC §6045; TD 10000
Sweep the other hooks → review
FBAR (mixed accounts), Form 8938, gifts > $19k → 709, noncash donation > $5,000 → qualified appraisal.
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Mandatory yes/no question on every return
Every individual return (Forms 1040, 1040-SR, 1040-NR, 1041, 1065, 1120, 1120-S) carries a digital asset question that must be answered 'Yes' or 'No'; it cannot be left blank. The 2025 wording asks: 'At any time during 2025, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?'2025 Instructions for Form 1040 (i1040gi); IRS 'Digital assets' pageView source ↗
What triggers a 'Yes' answer
Check 'Yes' if during the year you: received digital assets as payment for property/services; received them as a reward or award; received new digital assets from mining, staking, or similar activities; received them from a hard fork; disposed of a digital asset in exchange for property/services; sold a digital asset; exchanged or traded one digital asset for another; or otherwise disposed of a digital asset (or any financial interest in one).IRS, 'Determine how to answer the digital asset question'View source ↗
Activities that do NOT require 'Yes'
A 'No' answer is allowed if the only activity was: holding digital assets; transferring assets between wallets or accounts the taxpayer owns or controls; or purchasing digital assets with U.S. or other real currency (including via platforms such as PayPal or Venmo).IRS, 'Determine how to answer the digital asset question'View source ↗
Where crypto sales/dispositions are reported
Sales, exchanges, and other dispositions of digital assets held as capital assets are reported on Form 8949 (Sales and Other Dispositions of Capital Assets), with totals carried to Schedule D (Form 1040). Each disposition is listed separately.2025 Instructions for Form 8949; 2025 Instructions for Schedule D (Form 1040)View source ↗
Required description detail for a digital asset (column (a))
For a digital asset, column (a) must include the full name or an abbreviated symbol of the digital asset and the exact units sold or disposed of in the transaction, and include the sale transaction ID number, if available. Complete the date acquired, date sold, proceeds, and cost/other basis columns as for any capital asset.2025 Instructions for Form 8949View source ↗
Short-term digital asset boxes G / H / I
Beginning in 2025, Form 8949 has dedicated short-term digital asset boxes. Box G = short-term digital asset transactions reported on Form 1099-DA (or substitute statement) WITH an amount shown for cost or other basis. Box H = reported on Form 1099-DA WITHOUT a basis amount (or showing basis not reported to the IRS). Box I = digital asset transactions for which no Form 1099-DA was received. Do not use box C for digital asset transactions — use box I.2025 Instructions for Form 8949View source ↗
Long-term digital asset boxes J / K / L
Box J = long-term digital asset transactions reported on Form 1099-DA (or substitute statement) WITH basis reported to the IRS. Box K = reported on Form 1099-DA WITHOUT a basis amount (basis not reported to the IRS). Box L = digital asset transactions for which no Form 1099-DA was received. Do not use box F for digital asset transactions — use box L.2025 Instructions for Form 8949View source ↗
Schedule 1 — other income (non-business)
Crypto income received outside a trade or business (e.g., staking/mining rewards by a hobbyist, hard-fork receipts, rewards/awards) is reported as ordinary income, generally on Schedule 1 (Form 1040), line 8v ('Digital assets received as a reward, award, or payment for property or services') or line 8z, with no self-employment tax.2025 Instructions for Schedule 1 (Form 1040); IRS FAQs on digital asset transactionsView source ↗
Schedule C — business income and self-employment tax
Where digital asset activity (e.g., a trade or business of mining, or receiving crypto as payment for services rendered as an independent contractor) rises to the level of a trade or business, the income is reported on Schedule C (Form 1040) and is subject to self-employment tax (Schedule SE).IRS FAQs on digital asset transactions; 2025 Instructions for Schedule C (Form 1040)View source ↗
Statutory authority and final regulations
Broker reporting of digital asset dispositions is authorized under IRC § 6045 (returns of brokers), as amended by the Infrastructure Investment and Jobs Act. Final regulations were issued as TD 10000 (89 Fed. Reg. 56480, July 9, 2024), requiring reporting on new Form 1099-DA, 'Digital Asset Proceeds From Broker Transactions.'IRC § 6045; TD 10000, 89 Fed. Reg. 56480 (July 9, 2024)View source ↗
Gross proceeds reporting start date
Custodial brokers must report GROSS PROCEEDS on Form 1099-DA for sales of digital assets effected on or after January 1, 2025. These 2025 transactions are first reported on Forms 1099-DA filed/furnished in early 2026. (PHASE-IN — gross proceeds only for 2025; basis not yet required)TD 10000; IRS 'Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets'View source ↗
Cost basis reporting start date
COST (adjusted) BASIS reporting on Form 1099-DA begins for covered digital assets acquired and sold on or after January 1, 2026 (first reported on Forms 1099-DA filed/furnished in early 2027). A covered security is a digital asset acquired after 2025 in a custodial account; assets acquired before 2026 are noncovered and basis is not required (may be voluntarily reported). Most 2025 Forms 1099-DA will therefore show gross proceeds only, without basis. (PHASE-IN — basis reporting begins for 2026 acquisitions/sales, first reported in 2027)TD 10000; IRC § 6045(g)(3) (covered security); 2026 Instructions for Form 1099-DAView source ↗
Who must file (custodial brokers)
The TD 10000 final regulations apply to custodial brokers — persons who, in the ordinary course of a trade or business, stand ready to effect sales of digital assets for customers and take possession/custody (e.g., centralized digital asset trading platforms, certain hosted wallet providers, and digital asset payment processors).TD 10000; Treas. Reg. § 1.6045-1View source ↗
DeFi / non-custodial 'front-end' broker rule — REPEALED
Separate final regulations (TD 10021, 89 Fed. Reg. 106928, Dec. 30, 2024) would have treated certain non-custodial / DeFi 'trading front-end' participants as brokers required to report gross proceeds. That rule was disapproved under the Congressional Review Act; the joint resolution was signed into law as Public Law 119-5 on April 10, 2025, so the DeFi-broker rule has no force or effect, and Treasury reverted the § 6045 regulatory text to its prior form. DeFi front-ends are NOT required to file Form 1099-DA. (REPEALED — DeFi/non-custodial broker rule struck down by CRA (Pub. L. 119-5); no force or effect)TD 10021, 89 Fed. Reg. 106928 (Dec. 30, 2024); Pub. L. 119-5 (Apr. 10, 2025); 90 Fed. Reg. 31136 (July 11, 2025) removal of regulationsView source ↗
Recipient statement furnishing deadline (2025 tax year)
Brokers must furnish the payee statement reflecting Form 1099-DA information to customers by February 17, 2026 for the 2025 tax year (the standard February 15 due date for certain statements falls on a weekend/holiday). Most 2025 statements will not include cost basis.IRS, 'Tax professionals can prepare now to assist their clients with reporting proceeds from certain digital asset transactions'View source ↗
$10,000 digital-asset receipt reporting by a trade or business
$10,000IRC § 6050I; Instructions for Form 8300View source ↗
Enforcement delay — Announcement 2024-4
Per Announcement 2024-4, until the IRS issues final regulations under § 6050I to implement the Infrastructure Act, digital assets are NOT required to be included when determining whether cash received in a single transaction (or related transactions) exceeds the $10,000 reporting threshold. Form 8300 reporting of digital-asset receipts is therefore not currently required. (DELAYED — transitional relief; digital-asset Form 8300 reporting suspended pending final regulations)Announcement 2024-4, 2024-6 I.R.B. 715View source ↗
FBAR aggregate threshold
$10,00031 CFR §1010.350
Crypto-only foreign account — currently NOT FBAR-reportable
Under FinCEN Notice 2020-2 (Dec. 30, 2020), a foreign account holding ONLY virtual currency is not currently reportable on the FBAR. FinCEN announced its intention to propose amending the regulations to include virtual currency as a reportable account type, but as of the 2025 tax year that amendment has NOT been finalized, so a crypto-only foreign account remains outside the current FBAR rules. (UNCERTAIN / PROPOSED — FinCEN intends to amend regs to require reporting; not finalized as of TY2025)FinCEN Notice 2020-2, 'Report of Foreign Bank and Financial Accounts (FBAR) Filing Requirement for Virtual Currency'View source ↗
Mixed accounts (crypto plus reportable assets)
Caution: a foreign account holding virtual currency together with other reportable assets (e.g., fiat currency, securities) is a foreign financial account that can be FBAR-reportable under existing rules once the $10,000 aggregate threshold is met. The Notice 2020-2 exception applies only to accounts holding solely virtual currency. (UNCERTAIN — fact-specific; verify the account contents and broader FBAR account-type analysis)31 CFR § 1010.350; FinCEN Notice 2020-2 (by negative implication)View source ↗
Form 8938 reporting thresholds
Living in U.S. — unmarried: more than $50,000 last day of year or more than $75,000 any time; MFJ: more than $100,000 year-end or more than $150,000 any time. Living abroad — unmarried: more than $200,000 year-end or more than $300,000 any time; MFJ: more than $400,000 year-end or more than $600,000 any time.IRC § 6038D; IRS, 'Do I need to file Form 8938'View source ↗
Is crypto on a foreign exchange a specified foreign financial asset?
The IRS has not issued final guidance definitively treating digital assets held through foreign exchanges or platforms as 'specified foreign financial assets' for Form 8938. Treasury proposed regulations (REG-109309-22, Aug. 2024) would treat certain digital assets as specified foreign financial assets, but they are not yet final. Many practitioners report such holdings conservatively; the IRS notes the underlying account or arrangement may be reportable if it otherwise meets the definition. Treat as an open area. (UNCERTAIN / PROPOSED — no final rule explicitly covering directly-held crypto; verify positions case-by-case)IRC § 6038D; IRS 'Digital assets' page; proposed regs REG-109309-22View source ↗
Form 8283 for noncash crypto donations over $500
$500IRC § 170(f)(11); 2025 Instructions for Form 8283; Publication 526View source ↗
Qualified appraisal required when claimed value exceeds $5,000
$5,000CCA 202302012 (Jan. 13, 2023); IRC § 170(f)(11)(C)View source ↗
FMV deduction for long-term (>1 year) held crypto
Digital assets that are capital assets held for MORE than one year and donated to a qualified charity are generally deductible at fair market value (subject to AGI limits). Assets held one year or less are limited to the lesser of basis or FMV.IRC § 170(e); Publication 526 (Charitable Contributions)View source ↗
Form 709 required when a gift exceeds the annual exclusion
$18,000 per donee for 2024; $19,000 per donee for 2025IRC §§ 2503, 6019; 2025 Instructions for Form 709; Rev. Proc. 2024-40View source ↗
FMV substantiation and contemporaneous records
Taxpayers must keep records sufficient to establish the positions taken on their returns, including documentation of receipt, sale, exchange, or other disposition of digital assets and the fair market value (in U.S. dollars) of the digital assets at the time of each transaction. FMV is generally determined by converting at the exchange rate / spot price in a reasonable manner that is consistently applied.IRC § 6001; IRS FAQs on digital asset transactions (Q on records); Notice 2014-21View source ↗
Specific identification — contemporaneous records
To use specific identification of which digital asset units were disposed of (rather than the default FIFO under Rev. Proc. 2024-28), the taxpayer must have records showing, at the time of the transaction, the unit's acquisition date and time, basis and FMV at acquisition, and the date, time, FMV, and proceeds at disposition. Absent adequate identifying records, the default ordering applies. Rev. Proc. 2024-28 requires wallet-by-wallet (per-account) basis tracking beginning January 1, 2025. (Wallet-by-wallet allocation/safe harbor under Rev. Proc. 2024-28 effective for 2025)Treas. Reg. § 1.1012-1(j); Rev. Proc. 2024-28; IRS FAQs on digital asset transactionsView source ↗
Rendered from the canonical facts model · method attested Jul 6, 2026 (covers the method, not the currency of individual figures). General reference only — confirm with a qualified professional before acting.
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Review status
Accountant-reviewed
Reviewed by a named licensed practitioner against the stated sources, as general reference material.
Accountant-reviewed
Reviewed by Christopher Aryee · 6 July 2026
Applicable period: 2025
A named accountant reviewed this complete Guide version within the stated scope. It is not a guarantee.
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