If I purchased a total of $8000 of bitcoin in 2018 and sold $8000 of bitcoin in 2020 (but still have .25 bitcoin left), do I need to report this? And how?

[dliptzin]

three purchase transactions in 2018 and 2 sale transactions in 2020.  I called and spoke to a live agent who had no idea what I was talking about.  I tried inputting all of the purchases and sales into turbotax, but I have 3 purchases and 2 sales, and I couldn't figure out how to do that.

[DaveF1006]

Actually you will report your sales by doing the following.

1. Federal>income and expenses>investment income>show more
2. Scroll to Cryptocurrency>start

Note: According to IRS Notice 2014-21, the IRS classifies cryptocurrencies as property, not cash or currency. Purchasing cryptocurrency with cash and holding on to it isn't a taxable transaction, but selling, exchanging, or using it to purchase goods and services is. if you purchase it with cash, you would not report it. 

[Opus 17]

The purchases aren't entered, only the sales.  You tax on the difference between your cost and the sales proceeds.  

Let's take the price on 7/1/2018 ($6400) and the price on 7/1/2020 ($9145) as examples. 

That means you would have bought 1.25 BTC.

Suppose you sold 1 BTC on 7/1/2020 and made $9145, leaving you with 0.25 BTC remaining in your account.

The 1 BTC you bought had a basis of $6400, so you bought something worth $6400 and sold it for $9145, your taxable profit (capital gain) would be $2745.

Then in the future, whenever you sell that last 0.25BTC, your basis will be $1600 (because you paid $6400 per BTC) so the difference between that basis and the selling price will be your taxable profit when you sell.