Short answer: check Yes if during the year you received crypto (as pay, a reward, staking, mining or a hard-fork airdrop) or sold, traded, spent or otherwise disposed of it. Check No if you only bought with dollars and held, or only moved coins between your own wallets without paying a fee in crypto.
The question itself, as the IRS words it: "At any time during the tax year, 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)?"
Check No if you
- Didn't own any digital assets
- Only held digital assets in a wallet or account, with no transactions during the year
- Bought digital assets with U.S. or other real currency but didn't sell
- Moved digital assets between wallets or accounts you own or control (unless you paid the transfer fee in crypto)
Check Yes if you
- Received digital assets as payment for property or services, or as a reward or award
- Received them from mining, staking or similar activities, or an airdrop from a hard fork (see our staking tax guide)
- Traded one digital asset for another, or sold for dollars or other currency
- Spent crypto on property, goods or services, in any amount
- Paid a transfer fee with digital assets
- Transferred ownership or a financial interest in a digital asset
If you answered Yes, what to file
- Sales, trades and other disposals of crypto held as a capital asset: Form 8949 and Schedule D (our Form 8949 guide).
- Staking, mining, fork and similar income: Schedule 1 (Form 1040).
- Paid in crypto as a contractor: Schedule C. As an employee: wages on Form 1040.
- Gave crypto as a gift: Form 709 may apply.
Every disposal needs the date, units, U.S. dollar value and your basis. For transactions in 2025 and later, brokers send Form 1099-DA with proceeds, but basis may be blank for coins bought before 2026 or transferred in (how to fix missing basis).
The easiest way to get those numbers is to import every exchange and wallet into one tracker: CoinLedger or Koinly both generate Form 8949. Compare them in our software roundup.
Messy history, DeFi, or a letter from the IRS? A crypto-savvy CPA is worth it. Browse the crypto CPA directory or find one in your state.
Source: IRS, Digital assets (retrieved 2026-10-21). Software links are affiliate links; CoinLedger code CRYPTOTAX10 gives 10% off. Disclosure. This is general information, not tax advice.
FAQ
I bought crypto but didn't sell it. Do I answer Yes?
No. The IRS says to check No if you purchased, but did not sell, digital assets using U.S. or other real currency.
I moved coins between my own wallets. Is that a Yes?
Generally No. Transfers between wallets or accounts you own or control are a No, unless you paid the transaction fee with digital assets. Paying a fee in crypto is a digital asset transaction.
I got staking or mining rewards. Yes or No?
Yes. The IRS lists receiving digital assets from mining, staking and similar activities as a reason to check Yes. That income goes on Schedule 1.
I sold at a loss. Do I still have to report it?
Yes. The IRS says you must report digital asset transactions whether or not they result in a taxable gain or loss.