What Is Form 8949?

Form 8949, "Sales and Other Dispositions of Capital Assets," is the IRS form where you list each individual cryptocurrency sale or disposal, including the acquisition date, sale date, proceeds, cost basis, and calculated gain or loss. Your Form 8949 totals then flow into Schedule D of your Form 1040, which summarizes your overall capital gains and losses for the tax year.

When Do You Need Form 8949?

You must file Form 8949 whenever you have a capital gain or loss from selling, trading, or otherwise disposing of cryptocurrency during the tax year. Under IRS Notice 2014-21, crypto is treated as property, so every disposal — whether selling for USD, swapping for another token, or spending on goods — triggers a reportable capital event.

According to the IRS Instructions for Form 8949 (updated annually), you should file this form if you sold or exchanged capital assets including stocks, bonds, and virtual currency. The form has been explicitly updated to reference digital assets since the 2022 tax year.

If you received a Form 1099-B or Form 1099-DA from an exchange, you will use the information on that form to complete Form 8949. If you did not receive a 1099, you must still report the transaction using your own records.

Understanding the Box System (A through F)

Form 8949 has two parts and six checkbox boxes. Selecting the correct box is critical because it tells the IRS whether your broker reported your cost basis and whether the transaction is short-term or long-term.

Part I: Short-Term Transactions (Held One Year or Less)

Box A: Basis was reported to the IRS on Form 1099-B or 1099-DA. These are "covered" transactions — your exchange reported both proceeds and cost basis to the IRS. Your reported numbers must match what the exchange reported, or you must explain any differences using adjustment codes.
Box B: Basis was NOT reported to the IRS. The exchange reported your proceeds but did not report cost basis. This is common for older exchange accounts or transfers between platforms where the receiving exchange does not know your original purchase price.
Box C: You did not receive a Form 1099-B or 1099-DA at all. This applies to most DeFi transactions, peer-to-peer sales, and transactions on exchanges that have not yet implemented 1099-DA reporting. After Congress repealed the DeFi broker reporting rule (Public Law 119-7, April 10, 2025), all DEX transactions fall into this category.

Part II: Long-Term Transactions (Held More Than One Year)

Box D: Long-term equivalent of Box A — basis was reported to the IRS (covered transaction)
Box E: Long-term equivalent of Box B — basis was not reported
Box F: Long-term equivalent of Box C — no 1099 received

How to Determine Your Box

For the 2025 tax year and forward, use this decision tree:

Did you receive a 1099-B or 1099-DA for this transaction?
- No → Box C (short-term) or Box F (long-term)
- Yes → Did the 1099 report your cost basis?
  - No → Box B (short-term) or Box E (long-term)
  - Yes → Box A (short-term) or Box D (long-term)
Is the holding period one year or less?
- Yes → Part I (A, B, or C)
- No → Part II (D, E, or F)

You need a separate Form 8949 for each box you use. If you have transactions in Box A, Box C, and Box F, you file three separate Form 8949s.

Column-by-Column Walkthrough

Each row on Form 8949 represents one disposal. Here is what goes in each column:

Column (a): Description of Property

Enter the cryptocurrency name and quantity sold. Be specific enough that the IRS can identify the asset.

Examples:

2.5 BTC
1,000 SOL
0.75 ETH (sold via Uniswap swap)

The IRS does not require you to list the exchange name in this column, but it can be helpful for your own records.

Column (b): Date Acquired

Enter the date you originally purchased or received the crypto. Use MM/DD/YYYY format.

For FIFO: this is the date of your oldest lot
For Specific Identification: this is the date of the specific lot you designated for sale
For crypto received as income (staking, mining, airdrops): this is the date you received the tokens

If you received the crypto in multiple lots and are selling a portion, the date depends on your cost basis method. Under FIFO (the IRS default per Revenue Ruling 2019-24), the date acquired is the oldest purchase date.

If you acquired the crypto on various dates and cannot specifically identify the lot, enter "Various" in this column.

Column (c): Date Sold or Disposed Of

Enter the date of the sale, swap, or disposal. For DeFi transactions, this is the block timestamp of the on-chain transaction.

Column (d): Proceeds

Enter the total amount you received from the sale, in USD. This includes the fair market value of any crypto received in a swap.

Per IRS Instructions for Form 8949, proceeds generally means the gross amount you received. For crypto-to-crypto trades, the proceeds equal the fair market value of the token received at the time of the swap.

If your 1099-DA reports gross proceeds that include fees, and you want to report net proceeds, you will need an adjustment (see Column g).

Column (e): Cost or Other Basis

Enter your cost basis — what you originally paid for the crypto, including purchase fees. If you received the crypto as income, your cost basis is the fair market value at the time of receipt.

Per IRC Section 1012, your basis is generally the cost of the property. For crypto, this includes:

The purchase price in USD
Transaction fees paid to acquire the asset (exchange fees, gas fees for purchases)
For income: the fair market value reported as ordinary income at the time of receipt

Column (f): Adjustment Code

If you need to make an adjustment between the amounts reported on your 1099 and the correct amounts, enter the applicable code. Common codes for crypto:

W: Wash sale adjustment. If you repurchased the same or substantially identical crypto within 30 days before or after the sale, the disallowed loss must be added to the cost basis of the replacement asset. Note: proposed IRS regulations (REG-106013-19) extend wash sale rules to digital assets — verify the effective date for your filing year.
E: Expense of sale not reflected in proceeds. Use this when your selling fees (gas fees, exchange commissions) were not subtracted from the proceeds on your 1099. The adjustment amount in Column (g) offsets these fees.
B: Basis reported to the IRS is incorrect. Use when your 1099 shows a wrong cost basis and you need to correct it.
T: Short-term gain reported on 1099-B as long-term (or vice versa). Use to correct the holding period classification.

Column (g): Amount of Adjustment

Enter the dollar amount of the adjustment. This is added to or subtracted from your gain/loss calculation.

For wash sales (code W): enter the disallowed loss as a positive number (it increases your current loss, reducing the benefit, and gets added to the replacement asset's basis)
For expenses (code E): enter the fee amount as a negative number (it reduces your gain)

Column (h): Gain or Loss

Calculate: Column (d) - Column (e) + Column (g) = Gain or Loss

A positive number is a gain; a negative number (enter in parentheses) is a loss.

Example row:

(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
1.5 BTC	03/15/2024	11/20/2025	$142,500	$63,000	E	($25)	$79,475

This shows a sale of 1.5 BTC, held from March 2024 to November 2025 (long-term), with $25 in selling fees deducted via code E, resulting in a $79,475 long-term capital gain.

From Form 8949 to Schedule D

After completing all your Form 8949s, the totals flow to Schedule D:

Schedule D, Part I (Short-Term)

Line 1a: Short-term gains from 1099-B Box A where no adjustments are needed (can be reported directly on Schedule D without Form 8949)
Line 1b: Short-term gains from Form 8949, Box A
Line 2: Short-term gains from Form 8949, Box B
Line 3: Short-term gains from Form 8949, Box C
Line 7: Net short-term capital gain or loss

Schedule D, Part II (Long-Term)

Line 8a: Long-term gains from 1099-B Box D, no adjustments needed
Line 8b: Long-term gains from Form 8949, Box D
Line 9: Long-term gains from Form 8949, Box E
Line 10: Long-term gains from Form 8949, Box F
Line 15: Net long-term capital gain or loss

Schedule D, Part III

Line 16: Combine net short-term (Line 7) and net long-term (Line 15)

If you have a net capital loss, per IRC Section 1211(b), you can deduct up to $3,000 per year ($1,500 if married filing separately) against ordinary income. Excess losses carry forward to the next tax year under IRC Section 1212(b).

TXF Format for TurboTax

If you use TurboTax, you can import your Form 8949 data using a TXF (Tax Exchange Format) file. TXF version V042 is the current standard. The file contains transaction-level data that TurboTax maps directly to Form 8949 fields.

A typical TXF entry includes:

Record type (sale of capital asset)
Description matching Column (a)
Date acquired matching Column (b)
Date sold matching Column (c)
Cost basis matching Column (e)
Sale proceeds matching Column (d)

Most crypto tax calculators, including dTax, can generate TXF files for direct TurboTax import. This eliminates manual data entry and reduces the risk of transcription errors, especially when you have hundreds or thousands of transactions.

Tips for Accurate Filing

Reconcile with your 1099: If you received a 1099-DA, ensure your Form 8949 entries match. The IRS cross-references these forms, and mismatches trigger automated notices (CP2000).
Do not aggregate transactions: The IRS expects each disposal to be listed individually on Form 8949. While Schedule D Line 1a/8a allows some aggregation for covered transactions with no adjustments, this exception is narrow. When in doubt, list each transaction separately.
Track transfers carefully: Moving crypto between your own wallets is not a taxable event, but failing to track transfers properly can cause your calculator to treat them as sales with zero cost basis — creating phantom gains.
Keep six years of records: While the standard statute of limitations is three years (IRC Section 6501), it extends to six years if you omit more than 25% of gross income. Given the complexity of crypto, maintaining comprehensive records for at least six years is prudent.

FAQ

What Box do I use for most crypto transactions?

For most individual crypto investors in 2025-2026, Box C (short-term) and Box F (long-term) are the most common. These apply when you did not receive a Form 1099-B or 1099-DA for the transaction, which includes all DeFi activity and many centralized exchange transactions during the early years of 1099-DA implementation. As exchanges roll out 1099-DA reporting, you will increasingly use Box A/D (basis reported) or Box B/E (basis not reported).

Do I need to list every single transaction?

Yes, as a general rule. The IRS expects each disposal to appear as a separate line on Form 8949. However, the IRS Instructions for Form 8949 note that if you have many transactions, you may attach a statement with the same information in a similar format. Some practitioners attach a computer-generated substitute Form 8949 (such as a PDF from tax software) and enter only the summary totals on the actual form. If you go this route, ensure the attachment contains all required columns and is clearly labeled.

Can I use software to auto-generate Form 8949?

Yes, and for most crypto taxpayers, this is the recommended approach. Crypto tax calculators like dTax generate completed Form 8949 PDFs with all transactions properly categorized by box, along with TXF files for TurboTax import. The software handles cost basis calculation, holding period determination, and adjustment codes automatically. You should still review the output for accuracy before filing — particularly checking that transfers are not misclassified as sales and that cost basis amounts match your purchase records.