Stock Market Tax Guide

Section 5: Crypto Tax Reporting — Complete Taxable Events Checklist

The IRS treats crypto as property, not currency. That means nearly every transaction is a potential taxable event. Most crypto traders drastically underreport because they don't know what counts.

Action	Taxable?	Tax Type	Notes
Buy crypto with USD	❌ No	—	This establishes your cost basis
Sell crypto for USD	✅ Yes	Capital gain/loss	Short or long term depending on hold period
Trade crypto for crypto (BTC→ETH)	✅ Yes	Capital gain/loss	The trade is a disposal — you realize gains on the BTC
Buy NFTs with crypto	✅ Yes	Capital gain/loss	Spending crypto = disposing of crypto
Receive crypto as payment	✅ Yes	Ordinary income	Taxed at fair market value at time of receipt
Crypto staking rewards	✅ Yes	Ordinary income	Taxed when received. Your cost basis = income value.
DeFi yield farming	✅ Yes	Ordinary income	Each reward receipt is income. Compounding = compounding tax events.
Airdrop received	✅ Yes	Ordinary income	Taxed at FMV when you gain "dominion and control"
Hard fork coins received	✅ Yes	Ordinary income	IRS guidance since 2019 says you owe tax at FMV when received
Transfer between your wallets	❌ No	—	Not a taxable event, but document it carefully
Crypto gift received	❌ No	—	Taxable when YOU sell. Basis = donor's original basis.
Crypto gift given (<$18,000)	❌ No	—	Annual gift tax exclusion. Over that, file Form 709.
Crypto donation to 501(c)(3)	❌ No	—	AND you can deduct fair market value. Best tax move in crypto.

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The "I didn't receive a 1099" mistake: Exchanges are only required to send 1099s above $600 (and many don't). Your tax obligation exists regardless of whether you receive a 1099. "I didn't get a form" is not a defense in an audit.

The full guide covers tax-loss harvesting strategy, the wash sale rule (and whether it applies to crypto), short vs long-term rates, and worked dollar examples showing exactly how different scenarios affect your bill.

Section 5: Crypto Tax Reporting — Complete Taxable Events Checklist

Read the full guide — it's free