Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)

Enter your cryptocurrency investment information on the Stock or Investment Sale Information screen. Entering crypto investment sales will generate Schedule D on your tax return.

If the wallet or exchange you used provided a Form 1099-DA, enter the information from the 1099-DA into the software.

If you weren't provided a Form 1099-DA, you can either:

• Use your crypto transaction history from your wallet or exchange to enter your sales.
• Use a crypto tax service to generate a Form 8949 of your crypto transactions. You can then enter the sales from your Form 8949 into our software.

Note: If you choose to report a summary of your transactions, you can send the Form 8949 your crypto tax service created as your summary statement.

More information on cryptocurrency held for investment:

What if I exchanged one crypto currency for another?

What if I used cryptocurrency to buy a product or service?

More information on other cryptocurrency transactions:

Do I need to enter cryptocurrency rewards or earnings even if I didn't receive a Form 1099-MISC?

Where do I enter each type of Cryptocurrency income?

Yes. Income paid or earned by buying, selling, exchanging, mining, or otherwise acquiring crypto is subject to taxation by the IRS. You can read the direction the IRS gave in Bulletin 2014-21.

Note: The IRS has additional cryptocurrency reporting requirements. For additional information see the FAQs on the IRS website.

Where you enter crypto income depends on how you earned the income. First, you must determine whether the crypto was earned from investment, mining, wages, or other income.

Crypto is not considered to be a currency by the IRS but is considered property. As property can have capital gains and losses, crypto can, too. The capital gains are taxed depending on the length of ownership. If you own the crypto less than 12 months before you sell it, it will be considered short term. If you own crypto 12 months or more before you sell it, it will be considered long term, and is usually taxed at a lower rate than short term.

For example, if you bought $1,000 worth of bitcoin in January and sold it in June for $2,000, you would have a $1,000 capital gain. Then, depending on your tax bracket, you would be taxed a certain percentage based on this increase.

Other taxable events include trading crypto to fiat currency or for another crypto, spending crypto, or earning crypto from mining.

You would not be taxed if you bought and held crypto in your wallet. Also, you would not be taxed if you transferred crypto from one wallet to another as long as you own both wallets.

Taxpayers using virtual currency need a way to track transactions to help make the tax filing process easier. If not properly reported, there could be interest or penalties. Depending on how many transactions you complete in a year, you can track each transaction on your own spreadsheet, or, for more frequent transactions, it might be best to go with a crypto tracking software (like Koinly, TokenTax, or TaxBit). Once you have imported your information, you will be able to get a report that can easily be used to fill in the information necessary to e-file your taxes.