How to Fill out Form 8949 for Cryptocurrency

IRS form 8949 explained

IRS Form 8949 is used to report capital gains and losses for assets including cryptocurrency and NFTs. Each taxable event (such as trading one token for another, selling coins, or disposing of NFTs) must be detailed here. You’ll list the dates of acquisition and disposal, proceeds, cost basis, and whether it’s a short-term or long-term transaction.

“I’ve seen many investors get stuck with the IRS 8949 tax form because they’re unsure how to list each transaction. Always maintain complete and organized records of every trade or sale. Whether you executed one NFT sale or multiple swaps on various exchanges, proper organization makes filing much smoother.”
– Tynisa (Ty) Gaines, EA (Tax Expert, TokenTax)

Schedule D for crypto tax reporting explained

Schedule D works alongside Form 8949, providing a single total of your capital gains and losses. While Form 8949 lists each transaction line by line, Schedule D sums up everything and classifies them as short-term or long-term. This helps the IRS quickly see your total gains or losses for the year.

Tax forms you’ll need to report crypto

Form 8949: Details your individual crypto or NFT disposals
Schedule D: Consolidates totals from Form 8949 to show overall gains/losses
Schedule 1 (1040): For reporting certain types of crypto income like staking rewards or airdrops

These documents together offer a full overview of your crypto activity to the IRS.

Learn more: How to Report Cryptocurrency on Taxes.

Who needs to fill out form 8949 for cryptocurrency?

US taxpayers who disposed of cryptocurrency during the tax year need to fill out Form 8949. Dispositions include selling, trading, or spending crypto. Even if you used digital currency to buy an item, that is technically a disposal and must be reported. If you hold crypto in a self-directed IRA, those transactions might be exempt, but verify with a tax professional.

Do I need both Schedule D and form 8949?

Yes. You report each transaction on Form 8949, then transfer the combined total of gains or losses to Schedule D. Submitting just one or the other leads to incomplete reporting. Presenting both forms confirms exactly how you arrived at your final numbers.

Filling out Form 8949: step by step

To complete Form 8949, you need accurate documentation of your crypto trades. This means sales, purchases, and exchanges. Even minor transactions or crypto-to-crypto trades count.

Step 1: Gathering personal information

Gather details about your disposals for the tax year. This means every sale or trade no matter how small. Organize account credentials for your exchange and wallet platforms so you can readily download reports or transaction histories.

Step 2: Transaction details

Form 8949 requires specifics such as the asset’s description (for example, 0.5 BTC or 2 ETH), the date you acquired it, and the date you sold or disposed of it. You’ll also need the proceeds (the amount you received) and your cost basis (the amount you paid). Some platforms provide a year-end summary that you can export as a spreadsheet.

Step 3: Calculating gains and losses

Identify whether each disposal is short-term (held less than 12 months) or long-term (held 12 months or more). Long-term gains often qualify for lower tax rates, so it’s important to distinguish them carefully. Your gain or loss is the difference between proceeds and cost basis. TokenTax will automatically classify each transaction and compute gains or losses for you.

Step 4: Completing Part I and Part II

Form 8949 is separated into short-term and long-term sections. Within each part, you’ll see checkboxes (A, B, or C) that indicate whether:

A 1099-B was issued and whether basis was reported to the IRS
A 1099-B was issued but basis was not reported
No 1099-B was issued at all

Most crypto users end up marking box C, since many exchanges don’t issue a Form 1099-B. If you did receive a 1099-B, choose box A or B as appropriate.

After inputting all transactions, total your figures and transfer them to Schedule D, which consolidates short-term and long-term gains or losses.

How to submit Form 8949?

Once you’ve finished listing every transaction, attach the completed Form 8949 to your federal income tax return. If filing online, your tax software should allow you to upload or import it directly. If mailing in a paper return, print Form 8949 and include it behind your main 1040. Keep all supporting documents (like CSV files from exchanges or wallet statements) in case the IRS requests verification.

Who must file Schedule D Form 1040?

Schedule D is required for any US taxpayer who recognizes capital gains or losses during the tax year, including gains or losses from cryptocurrency. If you only received crypto as a gift and didn’t sell or trade it, you might not need Schedule D. However, if you sold, traded, or spent crypto—resulting in a capital gain or loss—Schedule D must be filed.

Where to find Form 8949 and Schedule D

You can download current versions of both Form 8949 and Schedule D from the official IRS website. Be sure to select the right tax year edition, since these forms can change annually. If you use a professional tax prep service or software, these forms may also be included or generated automatically.

Information to provide on your crypto gain/loss on Form 8949

When filling out Form 8949 cryptocurrency details, make sure to include:

Asset description (for example, 1.2 ETH)
Dates acquired and sold
Proceeds (the amount you received when selling or disposing)
Cost basis (the original amount you paid, including fees)
Classification as short-term or long-term
Net gain or loss (difference between proceeds and basis)

Proper organization of these elements is essential. If you’re unsure about your asset’s cost basis or holding period, consult your exchange statements, blockchain explorers, or a crypto tax professional. Accurate details prevent errors and help you avoid a crypto tax audit.

See our expert picks of the best crypto wallets.

Common mistakes to avoid when filling out form 8949 for cryptocurrency

Failing to include all trades or spending events
Mixing short-term and long-term transactions
Using an incorrect cost basis, which can lead to miscalculated gains or losses
Forgetting to record NFT sales or trades

How TokenTax can help with your form 8949 for cryptocurrency

TokenTax integrates with popular exchanges and wallets to import your crypto transactions automatically. Our system calculates gains, losses, and the right classification (short-term or long-term) for each trade. We generate Form 8949, reducing manual work and human error.

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