How to Report Crypto on IRS Form 8949

Form 8949 is how the IRS tracks your crypto gains and losses. Every time you sold, swapped, or spent cryptocurrency in 2025, that transaction belongs on this form. It's simpler than it looks — here's a plain-English walkthrough of every column.

What is Form 8949?

Form 8949 is titled "Sales and Other Dispositions of Capital Assets." It's the form where you list every individual transaction involving property you sold or exchanged during the tax year — and since the IRS classifies cryptocurrency as property (not currency), every crypto disposal goes here.

Think of Form 8949 as a detailed ledger that you hand to the IRS. Each row is one transaction: you describe what you sold, when you bought it, when you sold it, how much you received, what you paid, and what your resulting gain or loss was. The IRS uses this to verify you're reporting accurately.

Who needs to file Form 8949? Anyone who sold, swapped, or otherwise disposed of cryptocurrency during 2025. This includes:

✓ Selling SOL or any Solana token for USD
✓ Swapping one token for another on a DEX (each swap is a disposal)
✓ Selling an NFT for SOL, USDC, or any other asset
✓ Using crypto to pay for goods or services
– You do NOT report transfers between your own wallets — those are not disposals
– Staking rewards and airdrops are income events, not capital gains — they go on Schedule 1, not Form 8949

How does Form 8949 relate to Schedule D? Form 8949 is the detail; Schedule D is the summary. You list each transaction on 8949, then transfer the net totals — short-term gains/losses and long-term gains/losses — to Schedule D. Schedule D then flows into your Form 1040. Most tax software handles this transfer automatically.

The Columns Explained

Form 8949 has eight columns, labeled (a) through (h). Here's what each one means in plain English, with crypto-specific examples.

Col (a)  Description of Property
         What you sold. Be specific: "0.5 SOL", "1 BONK", "DeGods #4521 NFT"
         For large numbers of the same asset, you can summarize by lot.

Col (b)  Date Acquired
         When you originally purchased or received the asset.
         Format: MM/DD/YYYY
         If inherited or received as a gift, use the original owner's date.
         For airdrops: use the date the tokens arrived in your wallet.

Col (c)  Date Sold or Disposed Of
         When you sold, swapped, or otherwise disposed of the asset.
         Format: MM/DD/YYYY

Col (d)  Proceeds (Sales Price)
         The USD value you received for the asset at the time of sale.
         For token-to-token swaps: the USD fair market value of the asset
         you received on the date of the swap.
         Do NOT subtract fees here — fees go into cost basis instead.

Col (e)  Cost or Other Basis
         What you originally paid for the asset, in USD.
         Includes the purchase price + any transaction fees paid to acquire it.
         For mined or staked tokens: the USD value when received (this becomes
         both your income and your cost basis for future sales).

Col (f)  Adjustment Code
         Usually left blank for typical crypto transactions.
         Use code "B" if you have a wash sale loss disallowance.
         Note: The wash sale rule currently applies to securities, not crypto —
         but this may change. Check with your CPA if you sold at a loss and
         bought the same asset within 30 days.

Col (g)  Amount of Adjustment
         The dollar amount of any adjustment from column (f).
         Leave blank if column (f) is blank.

Col (h)  Gain or Loss
         Simply: Proceeds (d) minus Cost Basis (e), plus or minus any
         adjustment (g).
         Positive = gain (you owe tax on this)
         Negative = loss (this reduces your taxable gains)

A complete row for a simple SOL sale might look like this:

Example row:

(a) 2 SOL
(b) 03/15/2024
(c) 11/20/2025
(d) $420.00          ← 2 SOL × $210 market price on Nov 20, 2025
(e) $40.00           ← 2 SOL × $20 original purchase price
(f) (blank)
(g) (blank)
(h) $380.00          ← Long-term gain (held over 1 year)

Short-Term vs Long-Term Critical Distinction

Form 8949 is divided into two parts, and every transaction goes into exactly one of them. The determining factor is the holding period — how long you held the asset between acquisition and disposal.

Part I — Short-Term Transactions (held 12 months or less): These gains are taxed at ordinary income rates (10%–37%). Part I has three checkbox options at the top:

A Box A: Transactions reported on a 1099-B (or 1099-DA) with basis reported to the IRS. Check this if your exchange gave you a form showing your cost basis.
B Box B: Transactions reported on a 1099-B (or 1099-DA) but basis NOT reported to the IRS. Common for older on-exchange transactions.
C Box C: Transactions NOT reported on a 1099-B or 1099-DA. This is where most DeFi, DEX swaps, and self-custody wallet activity goes for 2025 taxes.

Part II — Long-Term Transactions (held more than 12 months): These gains qualify for preferential tax rates of 0%, 15%, or 20%. Part II has the same Box D/E/F structure mirroring the A/B/C above.

The one-year rule is counted precisely from the date of acquisition. If you bought SOL on January 15, 2024, the long-term threshold is January 16, 2025. A sale on January 15, 2025 would be short-term by one day. The IRS checks this, and tax software tracks it automatically — but if you're filling manually, be careful with exact dates.

Practical guide: which box for most Solana users?

Self-custody wallet (Phantom, Solflare, Ledger):
  → Box C (short-term) or Box F (long-term)
  → No 1099 issued for these wallets

Centralized exchange purchases (Coinbase, Kraken):
  → Box A or Box B depending on whether basis was reported
  → Check your 1099-DA from the exchange

DEX swaps (Jupiter, Raydium, Orca):
  → Box C (short-term) or Box F (long-term)
  → DEXes are not currently required to issue 1099s

Common Mistakes to Avoid

These are the errors that most frequently cause IRS correspondence, underpayment, or amended returns for crypto filers. Most of them are easy to avoid once you know what to watch for.

✕ Forgetting crypto-to-crypto swaps are taxable. This is the #1 mistake. When you swap SOL for USDC on Jupiter, that's a taxable disposal of SOL — even though you never touched USD. Each swap generates a gain or loss based on SOL's USD value at the moment of the swap.
✕ Using zero cost basis for airdropped or staked tokens. Tokens you received as staking rewards or airdrops were taxed as ordinary income when you received them. Their fair market value at receipt becomes your cost basis for future sales. Using zero cost basis double-taxes you — you pay income tax when received, then capital gains on the full sale price instead of just the appreciation.
✕ Thinking small transactions don't need to be reported. There is no de minimis threshold for cryptocurrency. A $12 swap on Jupiter is just as reportable as a $12,000 one. The IRS does not have a minimum transaction size for crypto. Every disposal belongs on Form 8949.
✕ Missing DeFi transactions. Depositing into a liquidity pool, withdrawing LP tokens, claiming farming rewards — these can all be taxable events depending on how they're structured. They don't show up on any 1099 form. If you used DeFi protocols in 2025, you need to review your on-chain history carefully.
✕ Reporting staking income on Form 8949 instead of Schedule 1. Staking rewards are ordinary income when received — not a capital gain. They go on Schedule 1 (Other Income), not on Form 8949. When you eventually sell those staked tokens, that sale goes on 8949 using the fair market value at time of receipt as the cost basis.
✕ Not answering the digital asset question on Form 1040. Every 1040 asks: "At any time during 2025, did you receive, sell, exchange, or otherwise dispose of any digital asset?" If you did anything with crypto — even a single swap — you must answer "Yes." Answering "No" when you did transact is a false statement on a federal form.
✕ Inconsistent cost basis methods. If you use FIFO for one wallet and HIFO for another, or switch methods mid-year, you've got a problem. Pick one method and apply it consistently to all transactions. Document your choice in case you're ever asked.

LanaTax exports your Solana transactions in a format that maps directly to Form 8949 columns. Each row includes the date acquired, date disposed, amount, transaction type, and description — exactly what you need to fill in columns (a) through (h). Export your CSV, hand it to your CPA, and they can complete Form 8949 without hunting for data. It's free and takes a few minutes.

This is a general educational guide, not legal or tax advice. Form 8949 has nuances that depend on your specific situation — wash sale rules, inherited assets, business income from crypto, multi-year loss carryovers, and state tax treatment all vary. If you have significant gains, complex DeFi activity, or any uncertainty about how to classify a transaction, work with a CPA who has cryptocurrency experience.

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