What is Form 8949?

The United States form on which individuals list each sale of a capital asset, including crypto, with dates, proceeds, and basis, before the totals carry to Schedule D.

Exchanges do not file it for you. Figures from a tracking tool still have to reconcile with any form 1099 da you receive, and where they differ the form is where you explain the difference.

The scale of the task surprises people. This is a line-by-line form. Every disposal is its own row with an acquisition date, a disposal date, proceeds, and basis, which means a year of weekly buys and occasional sells produces a great many rows rather than one summary figure.

How it works

Sales are separated into short-term and long-term sections, because the United States taxes them at different rates, with the boundary at more than one year of holding. Within each section, rows are grouped by whether the transaction was reported to the Internal Revenue Service by a broker and whether the basis was reported alongside it (source: Internal Revenue Service instructions for Form 8949).

Each row carries a description, the date acquired, the date sold, the proceeds, the cost basis, any adjustment, and the resulting gain or loss. Totals flow to Schedule D, which is where the net position for the year is computed.

Which units a row refers to depends on your cost basis method, and the choice has to be applied consistently and supportable from your records. Where you used specific identification, the identification generally has to be made at the time of the sale rather than reconstructed afterwards.

Two things drive the reconciliation work. Transfers between venues break the chain a broker can see, so a sale reported without basis needs your own acquisition record. And every disposal counts, not just sales for currency: trading one asset for another and spending crypto on goods are both taxable events under this treatment.

Example

Illustrative arithmetic for one row. You bought 0.5 units on March 3 for $15,000 including fees, and sold them on November 20 the same year for $22,000 net of fees. Proceeds $22,000, basis $15,000, gain $7,000, short-term because the holding period was under a year. A second row for a purchase two years earlier would sit in the long-term section instead, even though both sales happened the same day.

Why it matters when you buy

The number of rows you will fill in later is decided by how you buy now, so many small purchases across several venues create the reconciliation problem before there is anything to reconcile. Fees paid at purchase generally add to basis, which is another reason to keep the confirmations. Read the rule for your jurisdiction at the tax pages.

Related terms

form 1099 da — the broker report you reconcile against, cost basis — the figure each row needs, capital gains — what the form computes, taxable event — what creates a row, specific identification — choosing which units were sold, tax loss harvesting — using losses reported here.

Questions

Do I need a row for every single trade?

Every disposal needs to be accounted for. The instructions permit certain summarized entries in defined circumstances, and the conditions are specific, so check the current instructions or ask a professional before summarizing.

Do exchange fees reduce my gain?

Fees paid to acquire generally increase basis and fees paid to sell generally reduce proceeds, which lowers the gain either way. Keep the confirmations that show them.

What if I only bought and never sold?

Buying alone is not a disposal, so there is nothing to report on this form. The purchase still matters, because it sets the basis a future sale will be measured against.