Crypto tax

[sx_turbotax25]

First time investing in the crypto world in 2025 and I clueless about how to file it on my tax return. Questions:

1. If the broker isn't registered in the U.S and no tax forms are issued by them, do I still need to report it on my tax return?

2. Or do I only report it on my tax return if the broker issued a tax form?

[DawnC]

1. - YES  and  2. - NO.   You have to report all of your income whether on a tax form or not.   You can enter your crypto information into TurboTax in the Investments income section without a tax form.   

When an investment property (such as a cryptocurrency) is sold, a capital gain results if the sale proceeds are more than the cost of the property when acquired, plus any transaction costs. If the proceeds are less, it’s a capital loss.  

How do I enter my crypto in TurboTax?   

Cryptocurrency Guide

[sx_turbotax25]

1. If capital gain is related 'crypto lending', will I have to report the profit on my tax return?

2. Overall in 2025, I lose most of my initial money in the crypto lending project, can I report this capital loss?

[RogerD1]

1. Yes.  If you received interest income from lending cryptocurrency, this income would be reported as interest income and would be taxed as ordinary income and not as a capital gain.

2.  If you sold the cryptocurrency at a loss in 2025, then it can be reported as a capital loss on your tax return.  If you have not yet sold the cryptocurrency, then there would be nothing to report on your tax return for 2025.

A new form for 2025, called 1099-DA Digital Asset Proceeds from Broker Transactions" is required to be issued by brokers for sales of cryptocurrency.  This information can be used to determine gains and losses from cryptocurrency sales.  Because 2025 is a transition year for 1099-DA, brokers are not required to include "basis" (typically the amount of money you invested in the cryptocurrency that was sold).  It is helpful to know this "basis" as this will be needed to correctly determine the gain or loss you incur on crypto sales.  For years 2026 and beyond, brokers will be required to include the basis information on crypto sales, which will make tax reporting easier!

[sx_turbotax25]

#2 - The loss wasn't due to selling/sold of a cryptocurrency, it was due to the DeFi application or platform collapsed (likely due to scam). How does the tax treatment applied to this kind of scenario?

[AmyC]

Once you know the investment is worthless with no reasonable prospect of recovery, you can file the loss. Your basis is used for all calculations, not the fair market value at the time of incident.

How to file the loss varies with the circumstances. Collapse, scam, or Ponzi scheme:

• Scam: you can show "criminal intent"-perhaps you have a statement from the liquidator or police report, etc. you can claim theft on Form 4684. See @MarilynG1  here for instructions. Be sure to select that this is Business or Income Producing property
• Collapse: If instead, the platform made poor decisions and went bankrupt, you claim a capital loss on From 8949, Sch D. 
• Ponzi: If the government has identified it as a Ponzi scheme you may qualify for the Safe Harbor.

Be sure to keep all your records as this is a high scrutiny area by the IRS.

See What To Know About Cryptocurrency and Scams - FTC