Cryptocurrency Tax Preparation

Digital Assets

Buying, selling, swapping, staking, or getting paid in crypto can all have tax consequences, and exchange records don’t always tell the whole story. We prepare your individual return with your digital asset activity reported carefully: gains and losses where they belong, and income where it’s income.

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What we prepare and report

Sales and exchanges of cryptocurrency, including crypto-to-crypto trades, reported on Form 8949 and Schedule D.
Capital gains and losses, short-term and long-term, based on how long you held each asset.
Cost basis for what you sold, from your records, exchange reports, and any Form 1099-DA or 1099-B you receive.
Staking and mining rewards, and other crypto you received as income.
Crypto received for goods or services, which is income when you receive it, on Schedule C if it’s part of your business.
The digital asset question on the front of Form 1040, answered accurately.

Common tax considerations

Not all crypto activity is a capital gain

Selling or trading crypto generally produces a capital gain or loss. But rewards from staking or mining, airdrops, and crypto you’re paid with are generally ordinary income, valued when you receive them. That value then becomes your basis when you later sell.

Cost basis and transfers between wallets

Your gain depends on what you originally paid. When coins move between exchanges and wallets, the exchange that sells them may not know your original cost. Moving coins between your own wallets isn’t a sale, but the records need to connect so the basis follows them.

Transaction records and reconciliation

Exchange exports, wallet histories, and tax forms often disagree. We reconcile them as far as your records allow and ask you about gaps.

Calculation tools and services. For larger or more complex transaction histories, we use specialized calculation tools such as Bitcoin.tax and Chainglance, then review the results and prepare your return ourselves. When we use an outside tool or service, we share only the transaction data needed, under a reference number, with your name and other identifying details removed. We obtain your permission first when the law requires it. Learn more about how we protect your information.

Documents and records to gather

Forms 1099-DA, 1099-B, 1099-MISC, or 1099-K from exchanges
Transaction history exports (CSV) from every exchange
Wallet addresses or histories for self-custody wallets
Records of what you paid, if bought before an exchange tracked it
Staking, mining, or reward statements
Records of crypto received as payment
Any crypto tax-software reports you already have
Prior-year returns showing crypto activity or loss carryovers

Fees and limits. Crypto returns are quoted on their complexity. Additional fees may apply for many transactions, missing records, or reconciliation work. We work from the records you can provide; we can’t promise to reconstruct every past transaction when records are missing.

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If you’re paid in crypto for your work.

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The Square Penny provides tax preparation, not investment advice. You receive a quote after we review your intake and documents.