When you trade, sell, or even spend cryptocurrency, a digital asset that can be bought, sold, or exchanged on blockchain networks. Also known as crypto, it's treated as property by tax authorities—not currency. This means every transaction, no matter how small, can trigger a taxable event. If you bought Bitcoin in 2020 and sold it for a profit in 2024, you owe taxes. If you swapped Ethereum for Solana, that’s a taxable trade. Even using crypto to buy a coffee counts. Most people don’t realize this—and end up getting hit with penalties.
That’s why crypto tax reporting, the process of calculating and declaring gains, losses, and income from digital asset transactions to tax agencies isn’t just paperwork—it’s survival. You need to track every purchase, swap, airdrop, staking reward, and fee. Tools like Koinly and CoinTracker help, but they only work if you feed them accurate data. The IRS, HMRC, and other agencies now demand full transaction histories. They’re cross-referencing exchange data, blockchain analytics, and even wallet addresses. If you didn’t keep records, you’re guessing—and guessing wrong costs money.
And it’s not just about selling. crypto income tax, the tax owed on earnings from mining, staking, or receiving payments in crypto is often overlooked. If you earned $500 in ETH from staking in 2024, that’s taxable income at the market value when you received it. Same goes for airdrops—like the OneRare NFTs or ZOO tokens. Even if you didn’t sell them, you owe tax on their value when you got them. And if you’re running a crypto business? You need a full crypto compliance, a set of legal and operational steps to meet regulatory requirements for digital asset activities checklist: KYC, AML, licensing. Ignoring this isn’t just risky—it’s illegal.
Here’s what you’ll find in the posts below: real examples of what went wrong (like the dead RAM token or the vanished SLD airdrop), how to track token burns that affect your tax basis, and why exchanges like Orbix and Wagmi matter for compliance. You’ll see how cross-chain tracking tools help you follow funds across blockchains—and why that’s critical for accurate reporting. No fluff. No hype. Just what you need to avoid an audit, reduce your bill, and stay on the right side of the law.
Form 8949 is the IRS form you must use to report all crypto transactions in 2025. Learn what trades need reporting, how wallet-by-wallet accounting works, and why Form 1099-DA changes everything.
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