Sold crypto at a loss or at break-even? Under Internal Revenue Service (IRS) guidance, the sale still gets reported. Digital asset transactions must be reported whether or not they result in a taxable gain or loss. Crypto held for personal or investment purposes produces a capital gain or loss when it is sold or otherwise disposed of. That result goes on Form 8949. Digital assets count as property, not currency, for U.S. tax purposes. Brokers must report gross proceeds for transactions effected on or after Jan. 1, 2025. They must also report basis, generally the asset's cost in U.S. dollars, on certain transactions effected on or after Jan. 1, 2026.
Key facts from the IRS
- Legal status: Digital assets are property, not currency.
- Income: Income from digital assets is taxable.
- Return question: Federal income tax returns ask a Yes or No question about digital assets.
- Sales: Reported on Form 8949, whether the result is a gain or a loss.
- Forks, staking, mining: Income goes on Form 1040 (Schedule 1).
- Basis: Generally the cost in U.S. dollars.
Why a losing sale still goes on Form 8949
The IRS sorts crypto by how it is held. An asset owned for personal or investment purposes produces a capital gain or loss when it is sold or otherwise disposed of. Form 8949 is the form for those sales and other dispositions of capital assets. The duty to report does not depend on the result. A losing sale and a break-even sale are reported just as a profitable sale is. Timing matters too. A gain is short-term when the asset was held as a capital asset for one year or less before disposal.
For U.S. tax purposes, digital assets are considered property, not currency.
When the return question gets a No
Federal income tax returns ask a Yes or No question about digital assets, and filers must answer it. The IRS lists cases that get a No. Buying digital assets with U.S. or other real currency, without selling them, is one. That holds for purchases through electronic platforms as well. Moving assets from one wallet or account you own or control to another is a second case. The exception is a transaction fee paid with digital assets. In that case the No for transfers no longer applies. A separate explainer covers how to use a blockchain explorer to check a transfer.
Income is a separate track
Receiving crypto follows a different path from selling it. Under IRS guidance, income from digital assets is taxable. Income from forks, staking and mining is reported on Form 1040 (Schedule 1). Digital assets received in exchange for goods or services in a business context are taxed as ordinary income or a loss.
Sort your activity first
Four examples show how the IRS guidance sorts crypto activity. Buying with dollars and holding is one. Moving coins between your own wallets is a second. Selling or otherwise disposing of coins held for personal or investment purposes is a third. Receiving coins through mining, staking or a fork, or in exchange for goods or services in a business context, is a fourth. Buying and holding is a No case for the return question. A self-transfer is also a No case, unless the fee was paid in digital assets. A sale or disposal goes on Form 8949. Mining, staking and fork income goes on Schedule 1. Business receipts for goods or services are ordinary income or a loss. A filer with several activities sorts each one separately.
Crypto activity: which IRS path applies to it?
Pick one digital asset activity at a time and answer a few questions to see the IRS treatment or form for that activity.
Pick one activity you had with digital assets this tax year.
- Bought with dollars and held → A No case for this activity
- Moved coins between my own wallets → next question
- Sold or disposed of coins held for personal or investment use → Report a capital gain or loss on Form 8949
- Received coins via mining, staking, a fork, or for business goods or services → next question
Did you pay the transaction fee with digital assets?
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026How did you receive the coins?
- Mining, staking or a fork → Report it on Schedule 1
- In exchange for goods or services in a business context → Ordinary income or a loss
- Some other way → This tool does not cover that activity
The IRS lists buying digital assets with U.S. or other real currency, without selling them, as a case for No on the return question. Your return answer is No only if none of your other activity this year calls for a Yes.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026Moving assets between wallets or accounts you own or control is a No case when no transaction fee was paid with digital assets. Your return answer is No only if none of your other activity this year calls for a Yes.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026The IRS excludes self-transfers where a transaction fee was paid with digital assets. Digital asset transactions must be reported whether or not they produce a taxable gain or loss.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026For assets held for personal or investment purposes, a sale or disposal produces a capital gain or loss. It goes on Form 8949, even when there is no taxable gain.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026Income from digital assets is taxable. Income from forks, staking and mining is reported on Form 1040 (Schedule 1).
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026Digital assets received in exchange for goods or services in a business context are taxed as ordinary income or a loss.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026The tool resolves only mining, staking and fork income, and digital assets received in exchange for goods or services in a business context. Federal income tax returns ask a Yes or No question about digital assets, so check the IRS digital assets page for your case.
Source: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026The tool sorts one activity at a time, covers only the cases named in IRS guidance and does not calculate any tax owed.
What the 2025 and 2026 broker dates cover
The IRS sets two dates for broker reporting. Brokers must report gross proceeds for transactions effected on or after Jan. 1, 2025. Basis reporting has a later start date and a narrower scope. Brokers must report basis on certain transactions effected on or after Jan. 1, 2026. Basis is generally the cost of a digital asset in U.S. dollars.
Analysis: proceeds and basis answer different questions
Broker reports and a seller's own records answer different questions. A broker's gross proceeds figure covers transactions from Jan. 1, 2025. That figure alone does not give a gain or loss. The calculation also needs basis, which is generally the cost in U.S. dollars. Broker basis reporting starts only for certain transactions from Jan. 1, 2026. Staking adds a second layer. A staking reward is income reported on Schedule 1. A later sale of that same coin is a disposal reported on Form 8949.
Limits
The IRS digital assets page is undated and was retrieved Oct. 12, 2026. It gives no tax rates and does not define which transactions count for the 2026 basis rule.
Where to go deeper
The IRS digital assets page lists the Yes and No cases for the return question. It also names the reporting forms for sales and for fork, staking and mining income. Its broker compliance section sets out the two reporting dates. Before you file, check that page for whether the basis-reporting rule for certain transactions from Jan. 1, 2026 covers your transaction.
Sources: Digital assets | Internal Revenue Service (irs.gov), accessed Oct 12, 2026
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