📋 Crypto Taxable Events
🔴 Buying/Selling Crypto
Sell BTC for $50K (cost basis $40K) = $10K capital gain = TAXABLE. Short-term (<1 year) = ordinary income tax (up to 37%). Long-term (>1 year) = 0-20% capital gains (better).
🟡 Staking Rewards
Earn 0.5 ETH staking = $1,725 (at $3,450/ETH) = TAXABLE as ordinary income. Even if you hold 5+ years. Report on Form 1040.
🟢 Trading Crypto for Crypto
Swap ETH for SOL = TAXABLE event. Even though no USD involved. Calculated at ETH value at time of trade.
🔵 NFT Sales
Sell NFT for $10K (cost basis $3K) = $7K capital gain = TAXABLE. Same rules as crypto assets.
⚠️ Penalties for Not Reporting
Civil Penalty: 20-75% of unpaid tax + interest
Criminal Penalty: Tax evasion = up to 5 years prison + $250K fine
Statute of Limitations: IRS can audit up to 6 years back (sometimes more)
→ Report everything. Better safe.
💻 How to Report (Form 8949)
Step 1: Use tax software (CoinTracker, Koinly, TurboTax crypto) to calculate gains
Step 2: Fill Form 8949 (Sales of Capital Assets) for each trade
Step 3: Summary goes to Schedule D (Capital Gains/Losses)
Step 4: Schedule D attached to Form 1040 (main tax return)
⚠️ Disclaimer: Not tax advice. Consult a CPA familiar with crypto. Tax rules change constantly.