Does CoinTracker Report Your Crypto to the IRS?

CoinTracker does not report your crypto activity to the IRS. It’s a portfolio and tax-reporting tool, not a broker or exchange, so it has no obligation to send your transaction history to the federal government. You remain responsible for reporting your own digital asset activity, and CoinTracker’s job is to generate the forms you use to do that.

Why CoinTracker Has No Reporting Obligation

Federal reporting duties fall on “brokers,” meaning entities that stand ready to effect sales for customers. CoinTracker does not execute trades, custody assets, or settle transactions. It reads data from the exchanges and wallets you connect and organizes it into tax-ready reports. Treasury has noted that broker reporting rules should not extend to parties that lack access to the kind of transaction information useful to the IRS, a description that fits portfolio software rather than the venues that actually process trades.¹

The practical takeaway: nothing you enter into CoinTracker automatically reaches the IRS. Filing the information is still on you.

What Your Exchange Reports on Form 1099-DA

Exchanges are a different story. Under final Treasury regulations implementing changes from the Infrastructure Investment and Jobs Act, centralized exchanges and other digital asset brokers must file a new Form 1099-DA reporting transaction details to both you and the IRS.²

The rollout runs in two stages:

Starting January 1, 2025, brokers must report gross proceeds (what you received from sales) on Form 1099-DA.
Starting January 1, 2026, brokers must also report cost basis for digital assets that qualify as covered securities, generally assets acquired on or after January 1, 2026, through that broker.²

Assets you acquired before 2026 are treated as noncovered securities, so your broker may not report cost basis for them.³ That makes your own records, and a tool like CoinTracker, especially important for older holdings where the exchange won’t compute your gain or loss. Form 1099-DA replaces Form 1099-B for digital asset sales; the IRS now directs brokers to use 1099-DA instead.⁴

So the IRS already receives sale data directly from your exchange. Your return needs to match it.

The Digital Asset Question on Form 1040

Every federal income tax return has a yes-or-no question on page one of Form 1040 asking whether, at any time during the tax year, you received digital assets as a reward, award, or payment, or sold, exchanged, or otherwise disposed of a digital asset.⁵

Check “Yes” if, during the year, you:

Sold crypto for cash or swapped one digital asset for another.
Were paid in digital assets for goods or services, including stablecoin transactions.
Received staking rewards, mining income, or airdrops.
Gifted or donated digital assets.
Sold shares of an ETF that held digital assets.

You can answer “No” only if your activity was limited to buying crypto with U.S. dollars or other real currency, or simply holding it without any transactions.⁵ Answering inaccurately can draw IRS attention, since the agency uses the box as a screening tool.

What CoinTracker Generates for Your Return

CoinTracker’s main output is Form 8949, which itemizes every sale or exchange of digital assets you made during the year. Each transaction appears as a separate line showing what you sold, when you bought it, when you sold it, and the resulting gain or loss. Totals from Form 8949 flow to Schedule D, where your net capital gain or loss is calculated.⁶

Beginning with the 2025 tax year, Form 8949 has dedicated boxes for digital asset transactions. Short-term sales (held one year or less) go in boxes G, H, or I; long-term sales (held more than one year) go in boxes J, K, or L. Digital asset transactions should no longer be reported using the older boxes C or F.⁷ CoinTracker exports these as downloadable PDFs or CSV files you can import into tax software.

What Each Form 8949 Line Needs

Each line requires several data points for every transaction:

Description of the asset: the full name or ticker and the exact number of units sold (for example, “0.5 BTC” or “200 SOL”), plus the sale transaction ID if available.
Date acquired: when you originally received or purchased the asset.
Date sold or disposed of: when you sold, traded, or otherwise got rid of it. The gap between acquisition and disposal decides short-term versus long-term treatment.
Proceeds: what you received from the sale.
Cost basis: what you originally paid, including any transaction fees.⁷

Check each figure in CoinTracker against your exchange records before filing. If your reported cost basis doesn’t line up with what the IRS receives on your broker’s Form 1099-DA, you can receive a CP2000 notice, which is an automated letter flagging a mismatch between your return and third-party information reports.⁸

Choosing a Cost Basis Method

The cost basis method you pick decides which units of an asset are treated as sold when you make a trade, and it can change your tax bill significantly. CoinTracker lets you choose within its settings. The common options:

First-In, First-Out (FIFO): the earliest units purchased are treated as the first sold. This is the default brokers use when you don’t specify a preference.³
Highest-In, First-Out (HIFO): units with the highest cost basis are sold first, which tends to reduce taxable gain.
Specific Identification: you pick exactly which units to sell. Most control, most recordkeeping.

To use Specific Identification, the IRS requires you to identify the exact units being sold no later than the date and time of the transaction. Your records must show the date and time each unit was acquired, its basis and fair market value at acquisition, the date of disposal, and the fair market value at disposal.⁹ For assets held outside a broker, such as tokens in a self-custody wallet, you make the identification on your own books using any identifier that pins down the specific units, like purchase date and price.

Staking, Mining, and Airdrop Income

Not all digital asset income is a capital gain. Rewards from staking, mining, and airdrops are taxed as ordinary income at their fair market value when you receive them, and reported on Schedule 1 (Form 1040) as “other income.”¹⁰ If mining or staking is part of a trade or business rather than a personal activity, report the income on Schedule C.

For staking, Revenue Ruling 2023-14 requires you to include the fair market value of new tokens earned through proof-of-stake validation in gross income in the year you gain the ability to sell, exchange, or transfer them.¹¹ Your basis in those tokens equals the value you reported as income, so a later sale is taxed only on further appreciation.

Airdrops following a hard fork are treated the same way. Under Revenue Ruling 2019-24, if you receive new tokens from an airdrop and can transfer or sell them, you have ordinary income equal to their fair market value at that moment.¹²

CoinTracker can track these events if your connected exchange reports them, but cross-check that the fair market value and receipt date match your own records. Omitting staking or airdrop income is a frequent audit trigger because exchanges now report these payments to the IRS.

Filing Your CoinTracker Reports

Once your Form 8949 and Schedule D are generated, you have a few ways to get them into your return:

Tax software import: export a CSV or tax-exchange file from CoinTracker and import it into a program like TurboTax or TaxAct. The required fields populate automatically, which spares you manual entry across potentially hundreds of transactions.
Send the reports to a tax professional: provide the PDF versions of Form 8949 and Schedule D to a CPA or enrolled agent for review and filing.
Paper filing: print the completed forms, attach them to your Form 1040, and mail the return to the appropriate IRS service center.

If you e-file, your tax software usually confirms IRS receipt within about 24 hours. Failing to report digital asset transactions, even unintentionally, can result in interest on unpaid taxes, accuracy penalties, or an audit.⁶

How Long to Keep the Records

The general rule is to keep tax records for at least three years from the date you filed your return or two years from the date you paid the tax, whichever is later.¹³ Digital assets usually call for longer retention. Your basis in a token can stretch back years, and the IRS expects records sufficient to establish every position on your return, including acquisition dates, fair market values, and transaction details.¹⁴

A workable approach: keep records for as long as you hold the asset, plus at least three years after you file the return reporting its sale. Exporting your CoinTracker transaction history, exchange statements, and wallet records at year-end gives you a backup if the IRS ever asks you to document a gain or loss.

1
Federal Register. Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales
2
Internal Revenue Service. Final Regulations and Related IRS Guidance for Reporting by Brokers on Sales and Exchanges of Digital Assets
3
Internal Revenue Service. Instructions for Form 1099-DA (2025)
4
Internal Revenue Service. Instructions for Form 1099-B (2026)
5
Internal Revenue Service. Determine How to Answer the Digital Asset Question
6
Internal Revenue Service. Taxpayers Need to Report Crypto, Other Digital Asset Transactions on Their Tax Return
7
Internal Revenue Service. Instructions for Form 8949 (2025)
8
Internal Revenue Service. Understanding Your CP2000 Series Notice
9
Internal Revenue Service. Guidance for Taxpayers to Allocate Basis in Digital Assets to Wallets or Accounts as of January 1, 2025
10
Internal Revenue Service. Digital Assets
11
Internal Revenue Service. Revenue Ruling 2023-14
12
Internal Revenue Service. Revenue Ruling 2019-24
13
Internal Revenue Service. How Long Should I Keep Records
14
Internal Revenue Service. Frequently Asked Questions on Digital Asset Transactions