Form 8949
A U.S. tax form used to report each individual sale or disposal of a capital asset, including crypto, listing its cost basis, proceeds, and resulting gain or loss.
Form 8949 is a U.S. Internal Revenue Service tax form used to report the details of each individual sale, trade, or other disposal of a capital asset during the tax year — including the asset's cost basis (see Kaavon's "Cost Basis" glossary definition), the proceeds received, the dates of acquisition and disposal, and the resulting capital gain or loss for that specific transaction. For an active crypto trader, this can mean listing potentially hundreds or thousands of individual transactions.
The totals from Form 8949 feed into Schedule D (see Kaavon's "Schedule D" glossary definition), which summarizes a taxpayer's overall capital gains and losses for the year. Because manually completing Form 8949 for a large number of crypto transactions is impractical by hand, most active crypto traders rely on crypto tax software to aggregate transaction history across exchanges and wallets and generate a properly formatted Form 8949 automatically.
Examples
- An active crypto trader with hundreds of individual trades during the year would need to list each one separately on Form 8949, specifying its cost basis, proceeds, and resulting gain or loss.
- Most crypto traders use specialized tax software to generate Form 8949 automatically, since manually completing it for a large number of individual transactions would be highly impractical.