The Pomp Podcast
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.