Great answers from the previous expert.
I would add that it is always wise to report capital gains or losses to avoid IRS notices in the future for unreported investment income. When it comes to crypto and other investments that do not have a cost basis reported to the IRS via a 1099-B, the IRS will issue notices to the taxpayer stating they have unreported income and the IRS will assert that the taxable income is the gross sales proceeds since they don't have any information on the cost basis. To avoid getting IRS notices that may provide the wrong taxable income and assess taxes and penalties, you should report the investment transaction and include both the sales proceeds and the cost basis.
