Form 8949
IRS form used to report sales and dispositions of capital assets, including cryptocurrency.
What You Need to Know
Form 8949 is where you report every sale, trade, or exchange of capital assets like stocks, bonds, and cryptocurrency. Each transaction requires:
- Description of property (e.g., "0.5 BTC")
- Date acquired
- Date sold or disposed
- Proceeds (sale price)
- Cost basis (what you paid)
- Gain or loss
For Crypto: Every crypto-to-crypto trade, crypto-to-USD sale, or use of crypto to buy goods/services must be reported on Form 8949. The totals then flow to Schedule D to calculate your overall capital gains tax.
Tips:
- List transactions chronologically
- Attach additional pages if you have many transactions
- Some exchanges provide 1099-B forms, but you're still responsible for accurate reporting
- Use tax software or crypto tax tools (CoinTracker, Koinly) to generate Form 8949 if you have hundreds of transactions
Sources & References
This information is sourced from authoritative government and academic institutions:
- irs.gov
https://www.irs.gov/forms-pubs/about-form-8949
Related Calculators & Tools
Put your knowledge into action with these interactive tools:
Crypto Tax Calculator
Calculate cryptocurrency taxes with FIFO/LIFO cost basis tracking - short-term vs long-term gains, mining income, Form 8949 prep
Capital Gains Tax Calculator
Calculate federal and state capital gains taxes on stocks, crypto, real estate. Compare short-term vs long-term rates and get tax optimization strategies
Related Terms in Tax Planning
Capital Gains
Profits realized from selling investments like stocks, bonds, or real estate for more than their cost basis.
Cost Basis (Crypto)
The original purchase price of cryptocurrency plus fees, used to calculate capital gains or losses.
FBAR (Foreign Bank Account Report)
FinCEN Form 114 requiring U.S. persons to report foreign financial accounts exceeding $10,000 aggregate value.
FIFO (First In, First Out)
Accounting method where the oldest assets are sold first—the IRS default for cryptocurrency.
HIFO (Highest In, First Out)
Tax optimization strategy where you sell the highest-cost assets first to minimize capital gains.
Tax Credit
A dollar-for-dollar reduction in tax liability, providing direct savings on taxes owed.