Six lines that take crypto
Which lines of Schedule D does a crypto sale reach? On the 2025 version, six of them before any netting happens. The Schedule D instructions say codes G to L “were added to lines 1b, 2, 3, 8b, 9, and 10 to represent the reporting of digital asset transactions.”
Part I is for short-term results and Part II for long-term ones, with the boxes on Form 8949 deciding the line.
| Line | What goes there |
|---|---|
| 1a and 8a | Totals from Forms 1099-DA with basis reported and nothing to adjust, entered without Form 8949 |
| 1b and 8b | Form 8949 totals with box G or J ticked (A or D for stock) |
| 2 and 9 | Form 8949 totals with box H or K |
| 3 and 10 | Form 8949 totals with box I or L |
| 6 and 14 | Losses carried over from 2024 |
| 16 | Net gain or loss, copied to line 7a of Form 1040 |
| 21 | The deductible part of a net loss |
Whether a sale lands on line 1b or line 2 depends on whether box 2 is ticked on the 1099-DA a broker sends, the box that shows cost basis went to the IRS.
How the netting works
Line 7 gives the net short-term result and line 15 the long-term one. Line 16 combines them. A gain moves on to the tax worksheets. A loss goes to line 21, where the deduction is the smaller of the loss or $3,000, or $1,500 for married people filing separately.
Picture a bad year, in round numbers. Altcoins sold at a $10,000 short-term loss, one bitcoin sale with a $2,000 long-term gain. Line 16 shows minus $8,000, and only $3,000 of it comes off this year’s income on line 21.
The leftover $5,000 isn’t wasted. In a simple case like this one it carries into the following year, worked out on the Capital Loss Carryover Worksheet in that year’s instructions, and that carryover is exactly what tax-loss harvesting counts on.
The rate comes afterwards
Nothing on Schedule D sets a rate. Lines 17 to 20 pass a gain on to a tax worksheet, usually the one in the Form 1040 instructions. IRS Topic 409 puts net short-term gains at ordinary income rates, while long-held coins usually get 0%, 15% or 20%, depending on taxable income.
A single filer with taxable income of $48,350 or less paid nothing on long-term gains for 2025. For 2026, Revenue Procedure 2025-32 moves that line up to $49,450, and the 15% band now stops at $545,500. Britain’s capital gains tax runs on a £3,000 allowance and two rates instead.
Sales no broker reported
A Schedule D built only from the forms in the mailbox is likely to be short. Swaps from a self-custody wallet, and trades on a platform abroad, usually arrive with no form, since generally only a US digital asset broker has to file a Form 1099-DA, according to the IRS instructions.
The IRS doesn’t treat a missing form as an excuse. Answer 42 of its virtual currency FAQ wants every taxable transaction on the return “regardless of the amount or whether you receive a payee statement or information return.”
So those swaps go on Form 8949 under box I or L, and from there to line 3 or line 10. Will the map change for this year’s sales? Probably not. A draft of the 2026 schedule, posted ahead of time by the IRS with a creation date of April 1, 2026, has the same lines and the same $3,000 cap.
Not tax advice; general information only.