Unlocking the Mysteries of Cryptocurrency Taxation in the United States

This piece was originally published in March 2024 and has been updated to reflect the current reporting landscape. For detailed guidance on any topic below, follow the links to our in-depth guides.

When I started CountDeFi, the most common thing I heard from new clients was some version of "I don't even know where to start." That hasn't changed. The US digital asset reporting landscape is genuinely confusing. The rules are spread across IRS notices, revenue rulings, final regulations, and proposed guidance that keeps shifting. There's no single place the government lays it all out clearly.

Below is a starting point. Whatever your situation, one of these guides will get you oriented.

How are digital assets reported in the US?

The IRS treats digital assets as property. That means every sale, trade, or spend can create a reportable event, and the rates you pay depend on how long you held and how much you gained. It sounds simple, but the details matter enormously. Our US Crypto Tax Guide walks through everything: what triggers an obligation, how rates work, what counts as income, and how to file.

Can the Internal Revenue Service actually see my activity?

Yes. The IRS has been using blockchain analytics tools since 2015 and has obtained account data from major exchanges through John Doe summonses. With the arrival of Form 1099-DA, broker-reported data now flows directly to the agency. Our guide on whether the IRS can track your activity covers what they can see, how they find it, and what that means for your reporting.

What's changing with broker reporting?

Starting with the 2025 calendar year, brokers will begin reporting your digital asset sales directly to the IRS on a new information return. It changes the compliance landscape significantly. Our Form 1099-DA Guide explains what's on it, what's missing, and how to handle discrepancies.

Should I file an extension?

If your forms are late, your cost basis is unclear, or your situation is complex, filing Form 4868 for an automatic six-month extension is a legitimate and often smart move. Our extension guide covers how to file, what to pay, and why this might be the most responsible decision you make this filing season.

What about the things everyone gets wrong?

There are persistent misconceptions about digital asset reporting in the US, from "I don't owe anything if I didn't cash out" to "the IRS doesn't care about small amounts." We've addressed the most common ones in our guide on common myths about US digital asset reporting.

Not sure where you fit?

Every situation is different. If you're still unsure where to start, the best next step is a conversation. CountDeFi works exclusively with digital asset investors and businesses across the US, UK, and EU. Book a free call and we'll help you figure out what applies to you.