Many families bought little crypto, used apps like Robinhood/Coinbase, or received small rewards. The key is this: the IRS can treat many crypto actions like selling property, so taxes can apply even without “cashing out.”
Common taxable situations
• Sold crypto for cash
• Traded one coin for another
• Used crypto to buy something (even a small purchase)
• Received crypto rewards/bonuses (sometimes taxable as income)
Common non-taxable situations
• Buying crypto with cash and holding it
• Moving crypto between your own accounts (keep records)
What you need to provide at tax time
• 1099s from any app/exchange
• Transaction history/CSV for every platform you use
• If you moved crypto between platforms, note the transfers (date/amount)
Why accuracy matters
If cost basis is missing, tax software can treat sales as 100% profit. Good records can prevent unnecessary tax.
Action step
If you had any crypto activity—selling, trading, spending, or rewards—tell us which platform(s) you used so we can report it correctly.
Digital Assets & Taxes for Investors
If you’re an investor—real estate, stocks, or crypto—think of digital assets as property for tax purposes. That means every disposal can trigger capital gain/loss reporting.
Taxable investor activity
• Selling crypto for USD
• Trading coin-to-coin (BTC → ETH)
• Spending crypto (treated like a sale)
• Staking/mining/airdrops (often ordinary income when received)
Capital gains vs. ordinary income
• Capital gains/losses: selling/trading/spending assets you already own
• Ordinary income: staking rewards, mining income, certain bonuses/airdrops (generally based on fair market value when you receive control)
Loss planning
Capital losses can offset capital gains, and if losses exceed gains, up to $3,000/year can offset other income (carryforward available). Accurate basis is critical.
What we need (complete investor package)
• Exchange histories/CSVs for every exchange
• Wallet addresses or wallet reports (Ledger/MetaMask/etc.)
• DeFi activity (swaps, liquidity pools, bridges)
• NFT marketplace histories (if applicable)
Action step
If you traded across multiple platforms, don’t assume one exchange report is complete. Let us know the full list of platforms/wallets so we can reconcile basis and prevent “phantom gains.”
Digital Assets & Taxes for Retirees
Some retirees own digital assets as a small part of their portfolio or receive crypto as gifts/rewards. The IRS requires reporting for many types of activity.
When taxes commonly apply
• Selling crypto for cash
• Trading crypto for another crypto
• Using crypto to purchase goods/services
• Receiving rewards (staking) or bonuses
Why retirees should be careful
Digital asset gains can increase taxable income and may affect:
• Your overall tax bracket
• Taxability of Social Security (in some cases)
• Medicare premium brackets (income-related)
(You don’t need to panic, just report accurately and plan ahead.)
What we need
• 1099 forms from platforms (if any)
• Transaction history for any sales or trades
• Any reward statements if you earned staking rewards
Action Step
If you had any digital asset activity – even small – tell us early so we can plan for the reporting and avoid last-minute surprises.
Ready To Talk? Schedule an Appointment: https://redonicataxpros.com/schedule-appointment/
Bob Donica – Tax Pro
Bob Donica – Tax Pro
