How to Document
Crypto Income for the IRS
Form 1099-DA, Form 8949, Schedule D — a practical guide to turning your self-custody Bitcoin or Ethereum wallet activity into IRS-ready records.
✔ 1099-DA reconciliation · ✔ Form 8949 cost-basis CSV · ✔ CPA-ready
Generate Your IRS-Ready Statement$1 one-time · No subscription · Instant download
What Changed in 2025 — Form 1099-DA
For the 2025 tax year onward, US digital-asset brokers (Coinbase, Kraken, Gemini, etc.) issue a new IRS information return: Form 1099-DA — Digital Asset Proceeds From Broker Transactions. Two things you need to know:
1. Brokers only see their slice
A 1099-DA reports proceeds from disposals on that broker’s platform. The moment you move crypto to a self-custody wallet, the broker stops tracking it. Subsequent activity is invisible to them — and to the IRS unless you report it yourself.
2. You still report everything
Every disposal still goes on Form 8949 → Schedule D, regardless of whether a 1099-DA was issued. Your records must match the 1099-DA where one was issued, and stand on their own where none was. A wallet statement is the source of truth for the self-custody portion.
CryptoBankStatement is documentation. We don’t file your taxes or provide tax advice. Work with a CPA or enrolled agent.
Four Ways Crypto Becomes Income — and How to Document Each
The form on which it’s reported, and what evidence the IRS expects.
Form 8949 → Schedule D
Capital gains (sales, swaps)
Selling BTC for USD or swapping ETH for USDC. Reported per-transaction with date acquired, date sold, proceeds, cost basis, gain/loss.
Schedule 1 (Other Income) or Schedule C
Staking & DeFi rewards
Treated as ordinary income at FMV when received. Your wallet shows dated receipts; pricing data converts to USD.
Schedule C + Schedule SE
Self-employed crypto income
Paid in crypto for services? Ordinary income at FMV plus self-employment tax. Statement shows dated receipts.
Schedule 1 (Other Income)
Airdrops & forks
Taxable when you gain dominion and control. Statement timestamps the receipt; pricing applies the FMV at that moment.
Compatible with US Tax Software & Pro Tools
The CSV export lands cleanly into the workflows US CPAs already run.
Pro tax software
Drake, Lacerte, UltraTax, ProSeries, ATX, CCH Axcess — all read the structured CSV via their crypto-import flows.
Consumer tax software
TurboTax (Premier), H&R Block, TaxAct — accept the CSV in their crypto sections.
Crypto-tax aggregators
CoinTracker, Koinly, TokenTax, ZenLedger, CoinLedger — import the wallet-level CSV alongside exchange APIs.
Manual prep
Each row carries date, USD amount, transaction hash. CPAs working on paper get a clean reconciliation source.
Common Questions
Is crypto income taxable in the US?
Yes. The IRS treats digital assets as property (Notice 2014-21). Every taxable event — selling crypto for USD, swapping one coin for another, spending crypto on goods or services, receiving crypto as income — triggers reporting. Long-term capital gains apply when an asset is held more than 12 months; short-term gains are taxed as ordinary income.
What is Form 1099-DA and when does it apply?
Form 1099-DA (Digital Asset Proceeds From Broker Transactions) is the new IRS information return that custodial brokers — exchanges like Coinbase, Kraken, Gemini — must file starting with the 2025 tax year. Brokers report gross proceeds in 2025; cost-basis reporting phases in for tax year 2026 onwards. If you self-custody, no 1099-DA is issued for those wallets — but you still have to report disposals on Form 8949 and Schedule D, and the IRS expects your records to reconcile against any broker-issued 1099-DA.
How does CryptoBankStatement help with Form 8949 and Schedule D?
Form 8949 lists every digital-asset disposal — date acquired, date sold, proceeds, cost basis, gain or loss — feeding subtotals into Schedule D. The CSV export from CryptoBankStatement provides dated transactions with USD equivalents at the time of each transfer. That CSV imports cleanly into Drake, Lacerte, UltraTax, ProSeries, TaxAct, TurboTax, and into crypto-tax tools like CoinTracker, Koinly, TokenTax, and ZenLedger — which then produce the Form 8949 / Schedule D output your CPA files.
What about self-employed crypto income — Schedule C?
If you receive crypto for services (freelance work, mining, staking treated as a trade or business), it's ordinary income at the USD fair market value when received — reported on Schedule C (sole prop) or via your business return. A wallet statement showing dated receipts at FMV gives you and your CPA the source data. Cost basis for any later disposal of that crypto resets to the FMV at receipt, which your statement captures.
Do I need to report self-custody wallets if the broker already files 1099-DA?
Yes. The broker 1099-DA only covers transactions on their platform. Once you move crypto to a self-custody wallet (MetaMask, Ledger, etc.), the IRS expects you to maintain your own records for any subsequent disposals. The "Yes" answer to the crypto question on Form 1040 (Schedule 1) applies to all wallets, not just exchange accounts.
What about FBAR / FATCA for foreign-held crypto?
FinCEN Notice 2020-2 currently exempts crypto held in foreign wallets from FBAR reporting, but the IRS has signaled this may change. FATCA (Form 8938) reporting can apply if your aggregate foreign financial assets cross thresholds. CryptoBankStatement documents the on-chain history regardless of where the wallet is "held" (wallets are not jurisdictionally located in the traditional sense). Confirm specific reporting obligations with your tax professional.
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