You traded crypto. Now what?
If you sold, swapped, or received crypto in 2025, you owe taxes on it. The IRS treats crypto as property, which means every sale or swap is a taxable event. Staking rewards and airdrops are taxed as income when you receive them.
Don't panic. It's more straightforward than it sounds.
Step 1: Gather your transaction history
You need a complete record of every buy, sell, swap, and transfer. Pull this from:
Exchange CSVs: Download your transaction history from Coinbase, Kraken, Gemini, Crypto.com, Robinhood, or any exchange you used. Look for "Reports" or "Statements" in your account settings.
Wallet addresses: If you used self-custody wallets (MetaMask, Phantom, Ledger), you'll need the wallet addresses. Blockchain scanners can pull your on-chain transaction history.
Step 2: Calculate your gains and losses
For each sale or swap, you need:
Proceeds: What you received (in USD)
Cost basis: What you originally paid (in USD)
Gain or loss: Proceeds minus cost basis
Holding period: Short-term (< 1 year) or long-term (> 1 year)
Doing this manually across hundreds or thousands of transactions is painful. Crypto tax software handles this automatically.
Step 3: Choose your cost basis method
You can use FIFO (First In, First Out), HIFO (Highest In, First Out), or specific identification. Through 2026, the IRS lets you use whichever method you prefer on your own records.
HIFO usually produces the lowest tax bill. Compare both before you decide.
Step 4: Generate Form 8949
Form 8949 is where you report every individual sale. Each row includes the asset, date acquired, date sold, proceeds, cost basis, and gain/loss. This gets attached to Schedule D on your tax return.
If you have hundreds of sales, you don't have to list every one on the form. You can attach a detailed statement and summarize on 8949.
Step 5: Report income (staking, airdrops, mining)
Staking rewards, airdrops, and mining income are taxed as ordinary income at the fair market value when you received them. Report this on Schedule 1 (Other Income) or Schedule C if it's a business activity.
Step 6: File
Attach Form 8949 and Schedule D to your 1040. If you use TurboTax or H&R Block, you can import a CSV file from your crypto tax software.
The deadline is April 15, 2026 for the 2025 tax year. If you need more time, file an extension (Form 4868), but remember: an extension to file is not an extension to pay.
How CryptoTaxPilot makes this easy
Upload your exchange CSVs or paste your wallet addresses. CryptoTaxPilot automatically imports your transactions, compares FIFO vs HIFO, and generates your Form 8949 as a PDF or CSV. The whole process takes about 10 minutes.