Reporting Cryptocurrency on Your Tax Return

As investment in cryptocurrency becomes more mainstream, the IRS is paying closer attention to how it's reported on tax returns. If you bought, sold, or earned crypto in 2024, you may have tax obligations. While buying and holding crypto isn’t taxable, selling, trading, or using it for purchases triggers capital gains or losses. Short-term gains (held under a year) are taxed as ordinary income, while long-term gains are subject to lower tax rates. If you earned crypto through staking, mining, or as payment, it’s considered taxable income at fair market value when received. The IRS now asks about digital asset activity on Form 1040, so transparency is important.

What You Need to Know:

• Keep detailed records of all transactions, including purchase dates, amounts, and proceeds. Using a CPA can help ensure accurate reporting and maximize potential deductions.

• Don’t ignore your crypto tax  obligations—proper reporting can help you to potentially avoid being the target of an audit or subject to reporting penalties.

Reach out to one of valued tax team members if you have questions or need additional guidance!