The Crypto Investor's 1099 Tax Guide

You swapped ETH for SOL. The IRS calls that a sale.

No dollars moved. Nothing reached your bank. And you owe tax on the gain. Crypto is taxed as property, so every disposal - every swap, every purchase, every NFT bought with ETH - is a sale with a gain or a loss attached.

What you'll learn

• Which events are taxable — selling, swapping, spending, mining, airdrops, NFTs and hard forks, each with its treatment in a table you can scan
• How to work out a gain — basis, proceeds, holding period, and why one year and one day changes everything
• Form 1099-DA, box by box — what your broker now reports, what "covered" means, and why anything from your own wallet arrives with no basis at all
• FIFO, HIFO and specific identification — how to choose, and what records each one demands
• Where every kind of crypto income goes — Form 8949, Schedule D, Schedule 1, and when mining belongs on Schedule C instead
• Quarterly taxes on income nobody withheld from — and what to do when a good December produces a penalty
• Records that survive an exchange shutting down — because basis from four years ago decides the tax on next year's sale

New for 2026

• Long-term rates for 2026 — 0% up to $49,450 single and $98,900 joint, then 15% and 20%
• Form 1099-DA now reports basis — not just proceeds, but only for assets your broker custodied
• The wash sale rule still does not apply to crypto — what that allows, and why proposals to change it are worth watching
• $3,000 a year of net capital loss — against ordinary income, with the rest carried forward
• Form 2210 Schedule AI — the form that shrinks a penalty when your gains all came in November

Who this guide is for

• Anyone holding Bitcoin, Ethereum or any digital asset across more than one exchange
• Miners and people earning in crypto
• NFT buyers, sellers and creators
• Anyone who has traded for years without keeping records and knows it

Why this one is different

It shows the arithmetic and it says which year each figure belongs to. Every rate, threshold and deadline is collected again in a quick-reference appendix, with a glossary for the words exchanges use and never define, and ready-to-use tracking templates.

Use it as an educational companion throughout the year, then bring your organized records and specific questions to a qualified tax professional when your situation calls for personalized advice.

Read on this subject

Free articles on the questions this guide covers, each one checked against IRS sources.

• Paid in crypto, you earned dollars. What the coin does next is a separate tax. Income at the dollar value on the day it arrives — and a separate gain or loss when the coin moves.
• Your coins stopped being one pile on 1 January 2025 Basis is tracked wallet by wallet since 2025, and the 1099-DA follows the same rule.
• Moving coins between your own wallets is not a transaction — until you pay the fee in crypto Not a transaction — unless the network fee was paid in crypto.
• Form 1099-DA shows what you sold for. It may not show what you paid. The form reports what you sold for. Whether it reports what you paid depends on what you sold.