Hello @cpeoples21 !
Thanks for the question. I can give you some general info, and if you have more specific questions please go ahead and respond here.
In general, the IRS considers cryptocurrency to be property, and it is treated very similar to stock or other collectibles.
So, any time you exchange or sell cryptocurrency, you have a taxable event. This is true regardless of whether you actually receive dollars in the exchange. For example, if you exchange one cryptocurrency for another, you have a taxable exchange. Or, if you purchase something with cryptocurrency, that is also a taxable exchange.
Simply purchasing cryptocurrency is not a taxable event, however the IRS does require that you check the box on the first page of Form 1040 indicating that you purchased, sold or exchanged cryptocurrency during the year.
All of your taxable cryptocurrency exchanges and sales are reported on Schedule D and Form 8949.
One exception is if you are mining cryptocurrency. The IRS considers mining to be a business, and you report your mining activity on Schedule C for Self-Employed individuals.
I hope this helps you! Let me know if you have something further I can address.
Best,
Adam, EA
TurboTax Live Expert
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