How To Report Crypto On Schedule D (form 1040)
Key takeaways
- Schedule D provides an overall summary of your capital gains and losses.
- Before completing Schedule D, you have to fill out Form 8949 first, which lists each individual crypto transaction that resulted in a capital gain or loss.
- Using Crypto Tax Calculator simplifies the process by automatically organizing your crypto transaction data and creating ready-to-file tax forms for the IRS.
It’s the most wonderful time of the year – tax season!
As you get ready to take on your crypto taxes, you might have a few questions. Not sure what Schedule D (Form 1040) is used for? Don’t know the difference between Schedule D and Form 8949? We’ve got you.
In this guide we break down everything you need to know about Schedule D and how to fill it out.
What is Schedule D (Form 1040) Used For?
Schedule D works together with Form 8949, to provide an overview of your capital gains and losses from your investments, including crypto. The total that you report on Form 1040 should be based on your Form 8949 transactions.
Schedule D is broken down into three sections.
- Short-term capital gains and losses (if you owned it for less than a year).
- Long term capital gains and losses (if you held the asset for over a year).
- The sum (total) of the first two sections.
The first 2 sections are further broken down by whether or not the basis was reported to the IRS on a 1099-B.
- Most crypto taxpayers do not receive 1099-B’s for their crypto transactions. Therefore, when filling out Schedule D, you want to fill in the appropriate box which indicates whether or not your transactions were reported to the IRS on a 1099-B form.
- For short term transactions, this is box C on the 8949 and for Long Term transactions, this is box F on the 8949.
This form is combined with any other income or deductions you may have on Form 1040 so that the IRS can figure out if you owe anything from your investments, or if you should get a refund.
How to fill out Schedule D Form 1040 in 3 steps
After you’ve filled out Form 8949 with each crypto transaction, you will need to complete Schedule D by following three steps:
- Fill out Part 1 of the form for short-term capital gains and losses
- Fill out Part 2 for long-term capital gains and losses
- Complete the summary
Save yourself time with Crypto Tax Calculator’s IRS-Ready tax reports
Step 1: Short-term capital gains and losses
You’ll start by filling out Part 1, which details your short term capital gains and losses from assets that you held for less than a year. To fill this out, refer to the individual gains and losses listed on Form 8949 to calculate the totals for each. You’ll need to state:
- Column (d): Total proceeds from the sale
- Column (e): The total cost basis
- Column (h): The total gain or loss from the transaction
Look out for line 6, where you will report any short-term capital loss crossover. Line 7 is where you report your overall short-term capital gain or loss.
CTC tip: You can cross-check this against the Short Term Gains Total section of the Crypto Tax Calculator Capital Gain Report.
Step 2: Long-term capital gains and losses
Next is Part 2, where you complete your long-term capital gains and losses for assets held over a year. Similar to Part 1, refer to Form 8949 to check the relevant category and then complete:
- Column (d): Total proceeds from the sale
- Column (e): The total cost basis
- Column (h): The total gain or loss from the transaction
Line 14 is where you’ll enter any long-term capital loss carryover, and line 15 is for reporting your overall long-term capital gain or loss.
CTC tip: You can cross-check this against the Long Term Gains Total section of the Crypto Tax Calculator Capital Gain Report.
Step 3: Complete the summary
Finally, you complete Part 3 – the summary section that combines Part 1 and 2. On line 16 you write the result of adding line 7 and 15 together to determine your total capital gain or loss.
If there’s a total capital gain, you’ll go to line 17 and complete through 20. However, if there’s a capital loss, you’ll skip lines 17-20 and go to 21 and 22.
Note: You only need to fill out line 21 if you saw a loss on line 16.
CTC tip: If you have a lot of crypto transactions, Crypto Tax Calculator can help out by integrating with all of your crypto platforms to consolidate your transactions on Form 8949 for you. And, it will also generate Schedule D for you, completely filled out.
What Happens After You Fill Out Schedule D?
After you fill out Schedule D, you will have a summary of your capital gains or losses. You will need to report this on Form 1040, line 7 and submit it with the other tax forms outlined below.
How to report your crypto tax with Crypto Tax Calculator
Filling out Schedule D and reporting your crypto taxes is much more simple and time-efficient with Crypto Tax Calculator. Follow these steps to generate accurate reports which meet IRS reporting standards. You can file them with the IRS directly, using software like TurboTax, or hand them over to your accountant.
- Add Integrations and Import Transactions
Connect your exchanges, wallets, and platforms to import your transaction history. - Review for Accurate Results
Check your data for errors or missing details to ensure accuracy. - Get Your Tax Reports
Generate comprehensive tax reports ready for your accountant or tax authority.
If you're new to Crypto Tax Calculator, start with our Getting Started Guide for an overview of how the platform works.
Need more help? Visit our US Report Guides or explore the Help Center for step-by-step instructions.
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Tax forms you need to report crypto
There are several different tax forms you may need to use to report your crypto transactions. While we've already mentioned a majority of them, we'll provide a quick summary so you can ensure you've included all the correct forms when you file your income tax return:
- Form 8949: If you sold or otherwise disposed of any crypto in the last tax year, you'll report all information about those transactions on Form 8949, "Sales and Other Dispositions of Capital Assets."
- Schedule D (Form 1040): After completing Form 8949, you'll report all of your short-term and long-term capital gains and losses on Schedule D (Form 1040), "Capital Gains and Losses."
- Schedule 1 (Form 1040): If you had additional crypto income from staking, mining, airdrops, swaps, or compensation, you'll report it on Schedule 1 (Form 1040), "Additional Income and Adjustments to Income."
- Schedule C (Form 1040): If you're self-employed and earned any crypto from clients or other payments, you'll report it on Schedule C (1040), "Profit or Loss From Business."
- Form 709: If you gifted any crypto last year and the value exceeds the current gift tax exclusion set by the IRS, you'll have to report the gift on Form 709, "United States Gift (and Generation-Skipping Transfer) Tax Return."
