What if I exchanged one cryptocurrency for another?
Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)
Any trade of one cryptocurrency for another cryptocurrency is considered a sale and a purchase of new cryptocurrency by the IRS. You would need to report the sale using the dollar value at the time of exchange as the sale price. The new cryptocurrency you traded into would be taxable when you sell that cryptocurrency.
Transferring your cryptocurrency from one wallet you own to another wallet you own is not taxable if the cryptocurrency is not sold or exchanged as part of switching wallets.
Example: You purchased $1,000 of Bitcoin in 2024. In 2025 you trade your Bitcoin for Ethereum. On your 2025 tax return you would report a sale of your Bitcoin using $1,000 as the cost basis and the sale proceeds as the value in dollars of the Bitcoin at the time you traded it for Ethereum. You would enter this cryptocurrency investment information on the Stock or Investment Sale Information screen.
Any trade of one cryptocurrency for another cryptocurrency is considered a sale and a purchase of new cryptocurrency by the IRS. You would need to report the sale using the dollar value at the time of exchange as the sale price. The new cryptocurrency you traded into would be taxable when you sell that cryptocurrency.
Transferring your cryptocurrency from one wallet you own to another wallet you own is not taxable if the cryptocurrency is not sold or exchanged as part of switching wallets.
Example: You purchased $1,000 of Bitcoin in 2024. In 2025 you trade your Bitcoin for Ethereum. On your 2025 tax return you would report a sale of your Bitcoin using $1,000 as the cost basis and the sale proceeds as the value in dollars of the Bitcoin at the time you traded it for Ethereum. You would enter this cryptocurrency investment information on the Stock or Investment Sale Information screen.
