Yes, in most cases. The IRS treats cryptocurrency as property. If you sell, trade, or dispose of crypto and it results in a gain, you owe taxes. Even failing to report can trigger penalties.

Starting 2024, crypto brokers must report your transactions on Form 1099-DA. This includes centralized exchanges, payment processors, and certain DeFi platforms. The IRS will know even if you don't report.

Selling crypto for fiat, trading one crypto for another (ETH→SOL), spending crypto on purchases, mining rewards, staking rewards, airdrops, and NFT sales. Buying with fiat is NOT taxable.

Short-term gains (held <1 year) are taxed at your income rate (up to 37%). Long-term gains (held >1 year) are taxed at 0%, 15%, or 20% depending on your total income.

Yes! This is called 'loss harvesting.' You can use capital losses to offset gains. If you have more losses than gains, you can offset up to $3,000 of ordinary income per year.

No. Unrealized gains (profit on paper) are not taxable. You only owe taxes when you sell or dispose of the crypto. This is called 'realizing' your gains.

Yes. Airdropped tokens are taxable as ordinary income at their fair market value when you receive them. The cost basis is $0, so every token is 100% taxable income.

Staking rewards are taxable as ordinary income in the year you receive them. Then, when you sell, any additional gain is capital gains. It's two tax events.

Penalties range from 20% to 75% of the underpaid tax, plus interest. Willful failure to report can lead to criminal prosecution. The IRS is actively pursuing crypto tax cases.

Yes. You can deduct up to $3,000 in net capital losses against ordinary income each year. Any remaining losses carry forward to future years.

If you sold, traded, or received income from that crypto during the tax year, yes. Simply holding crypto on an exchange is not taxable, but any transactions are.

The best calculator depends on your needs. Look for one that supports all your chains, calculates cost basis automatically, and generates IRS-ready reports. Arthur Labs does all this free during testing!

Cost basis = what you paid for the crypto. When you sell, gain/loss = sale price minus cost basis. Methods include FIFO (first in, first out), LIFO, and HIFO (highest in, first out).

If your situation is complex (DeFi, lots of transactions, high net worth), yes. For simple situations (just bought and held), software plus a self-prepared return may suffice.

Form 1099-DA is the new IRS form for digital asset transactions. Starting 2024, brokers must send this form to investors and the IRS. It shows your total proceeds and cost basis.

Yes. Selling an NFT is like selling any other asset. If you create NFTs, the income is ordinary income. If you flip NFTs for profit, it's capital gains.

Use Form 8949 to list each transaction, then transfer totals to Schedule D. Income from mining/staking goes on Schedule 1. Complex situations may need Form 1040 Schedule C.

Each trade is TWO taxable events: selling the first crypto and buying the second. Even though you didn't get fiat, the IRS sees it as selling one asset and buying another.

Yes. Blockchain is public, and the IRS has blockchain analysis tools. Combined with 1099-DA forms from exchanges, the IRS has significant visibility into crypto transactions.

April 15 (or October 15 with extension). Quarterly estimates are due April 15, June 15, September 15, and January 15 if you owe significant tax.