David Kemmerer, Co-founder & CEO of CryptoTrader.tax: How The IRS is Viewing Crypto

— Cryptocurrency is classified as property by the IRS, meaning all disposals—including trades between crypto assets—trigger taxable capital gains or losses, even if no fiat currency is exchanged.

— Crypto-to-crypto trades are taxable events, creating complexity because trading Bitcoin for Ethereum, for example, realizes gains on the Bitcoin even though no cash changes hands.

— Exchanges cannot provide 1099-B tax forms because transaction data is fragmented across wallets and platforms; exchanges see only incoming assets without cost-basis history, leaving tax reporting responsibility on users.

— The IRS released new guidance in October 2019 and added a virtual currency question to the 1040 tax form requiring all 150 million US taxpayers to disclose whether they transacted in crypto.

— CryptoTrader.tax automates tax reporting by integrating with exchanges, calculating gains and losses in USD using historical pricing data, and generating IRS Form 8949 and audit trail documentation.

— International expansion and deeper DeFi coverage are the company's growth priorities, with launches planned for Canada, UK, and Australia, where capital gains treatment is broadly similar to the US.

— Treat every crypto transaction as potentially taxable: even swaps between cryptocurrencies trigger capital gains or losses, so maintain detailed records of purchase price, sale price, and the exact USD value at the time of each trade.

— Use specialized tax software early: use CryptoTrader.tax or similar tools to import exchange data and generate reports before year-end; don't wait until April to discover complexity or missing records.

— Educate your accountant or use crypto-specialist advisors: most traditional tax professionals lack crypto expertise, so provide detailed transaction reports and work with practitioners who understand property classification and staking/mining income separately from capital gains.