Your report package from Blockchain Crypto Tax Prep contains everything needed to accurately report your 2025 cryptocurrency activity. Here's what each file is and how you use it:
| File | What It Contains | How You Use It |
|---|---|---|
| Excel Workbook (.xlsx) e.g., YourName_2025_Crypto_Tax_Report.xlsx |
Pre-formatted Form 8949 summary sheets ready to file; transaction detail by exchange and wallet; short-term, long-term, and Schedule 1 income totals | Open the "Form 8949 โ Crypto Txns" tab for all numbers you enter in TurboTax. Open the "Form 1040 Schedule 1" tab for any crypto income totals. |
| PDF Tax Analysis e.g., YourName_TY2025_Tax_Analysis.pdf |
Narrative analysis of your gains and losses, asset-by-asset breakdown, tax planning notes, and any special items requiring CPA review | Read to understand your results. If forwarding to a CPA or tax preparer, send both this and the Excel workbook. |
| CPA Instructions PDF CPA_Instructions_2025_Crypto.pdf |
Step-by-step filing instructions for a tax preparer, with exact Form 8949 totals and IRS form destinations for each figure | Forward to your CPA if you are not filing yourself. This guide covers the self-filing path through TurboTax. |
These two files serve different purposes and work together:
- Excel workbook = the numbers. The Form 8949 summary tab has the exact proceeds, cost basis, and gain/loss figures you enter in TurboTax. This is your filing source. Open it when you sit down to file.
- PDF tax analysis = the context. It explains why the numbers are what they are โ asset-level breakdowns, methodology, tax planning notes, and any special items (theft losses, DeFi reclassifications, cost basis methodology). Read it to understand your results, and send it to your CPA.
Starting with Tax Year 2025, centralized exchanges (Coinbase, Kraken, Binance.US, PayPal, Crypto.com, etc.) are required to issue Form 1099-DA reporting gross proceeds to both you and the IRS. Cost basis is not required for 2025 though โ so many 1099-DA forms will show proceeds but leave basis blank or $0.
When comparing your 1099-DA against our report: the proceeds in our report should be equal to or greater than what appears on your 1099-DA. This is expected โ our report captures your complete transaction history, including activity your exchange may not have on record. Always use our figures.
The IRS added new checkboxes specifically for digital assets in 2025. Use these โ not the old Box C or Box F:
1099-DA received, basis reported to IRS
1099-DA received, basis reported to IRS
1099-DA received, basis NOT reported
1099-DA received, basis NOT reported
No 1099-DA (DeFi, on-chain, wallets)
No 1099-DA (DeFi, on-chain, wallets)
Your Form 8949 summary sheet labels the correct box for each group. Match that label to the TurboTax dropdown.
Form 1040 asks: "At any time during 2025, did you receive, sell, send, exchange or otherwise acquire any financial interest in any digital asset?" Answer Yes even if you only bought crypto and never sold anything.
Congress repealed the requirement for decentralized exchanges and non-custodial wallets to file 1099-DA. DeFi and on-chain transactions will not appear on any 1099-DA โ but they are still fully taxable. They are included in our report in the Non 1099-DA group.
You need TurboTax Premium or Deluxe (Online). Free Edition does not support Form 8949 or Schedule D.
turbotax.intuit.com and open or continue your 2025 return.We use the Sales Section Totals method โ one summary line per group from your Form 8949 summary sheet. This is IRS-approved. The full transaction detail is mailed separately (see Part H).
• Groups labeled with an exchange name (Coinbase, Kraken, PayPal, Crypto.com, etc.): select Yes.
• Groups labeled "Non 1099-DA": select No.
Your Form 8949 summary sheet identifies each group clearly.
- Check the box: "The cost basis is incorrect or missing on my 1099-DA."
- Enter the corrected cost basis from your Form 8949 summary sheet.
- If our proceeds are higher than your 1099-DA, that's normal and expected โ our report captures your full history. Our figures are correct.
TurboTax Desktop 2025 removed CSV import for crypto and does not natively support attaching a Form 8949 PDF. This is widely reported. Your practical options:
- Option 1 (Recommended): Enter crypto in TurboTax Online (free to start), then pull it into Desktop via File โ Import from TurboTax Online.
- Option 2: Manually enter the Sales Section Totals in Desktop โ go to Federal โ Wages & Income โ Investments & Savings and follow Part C steps.
- Option 3: Enter summary totals, e-file, and mail the full transaction detail with Form 8453 (see Part H).
Need a TXF file for Desktop import? Email us at info@cryptotaxprep.io and we can generate one for your account.
If your Excel workbook includes a "Form 1040 Schedule 1" tab with a non-zero Grand Total, you received crypto ordinary income in 2025 โ such as staking rewards, liquidity pool yields, airdrops, mining, or interest. This goes on Schedule 1, Line 8z โ not on Form 8949.
If you filed your 2025 return before receiving your report, or with incomplete crypto data, you need to file Form 1040-X. TurboTax supports online amendments for paid versions.
- Wait until the IRS has fully processed your original return โ typically 2โ3 weeks after e-file acceptance.
- If you expect a refund, wait until you receive it before amending.
- Form 1040-X for 2025 became available in TurboTax in early March 2026. If you see "not available yet," wait a few days.
- Deadline to amend and claim a refund: April 15, 2029 for your 2025 return.
irs.gov/filing/wheres-my-amended-return โ typically 8โ20 weeks to process.If you had cryptocurrency activity in 2021, 2022, 2023, or 2024 that was never reported โ or was reported incorrectly โ you should file amended returns. As exchanges now share data directly with the IRS via 1099-DA, prior unreported years carry increasing audit risk. Proactively amending puts you in a much better position.
| Tax Year | Originally Due | Refund Claim Deadline | Status |
|---|---|---|---|
| 2021 | April 18, 2022 | April 18, 2025 (passed) | โ Record correction only |
| 2022 | April 18, 2023 | April 15, 2026 | โก Urgent โ closing soon |
| 2023 | April 15, 2024 | April 15, 2027 | โ Open |
| 2024 | April 15, 2025 | April 15, 2028 | โ Open |
| 2025 | April 15, 2026 | April 15, 2029 | Current year |
TurboTax Online supports amendments for 2022, 2023, and 2024 if you originally filed with TurboTax. Follow these steps for each year you need to correct:
irs.gov/filing/wheres-my-amended-return. Prior-year amendments take 8โ20 weeks to process.Even if you originally used H&R Block, TaxAct, FreeTaxUSA, or a CPA, TurboTax Online can still prepare your 1040-X amendment.
- Start a new return in TurboTax for the prior year and select "I filed with a different service"
- Enter your original return figures when prompted, then add or correct the crypto data
- Alternatively, if you prefer to work through a CPA, contact us and we'll provide a CPA-ready instruction PDF for that prior year
Cost basis for cryptocurrency is cumulative across years. If you held assets from 2022โ2025, errors in earlier years carry forward into your current cost basis figures. Our report accounts for your full transaction history โ do not make manual basis adjustments without consulting us first, as changes to prior years may also affect your 2025 numbers.
For Tax Year 2025, many clients received a Form 1099-DA from their exchange that shows proceeds but has blank, zero, or incorrect cost basis. This is an industry-wide issue โ exchanges were only required to report gross proceeds for 2025, not cost basis. Our report corrects for this.
Below is a breakdown of every scenario you may encounter and exactly what to do in TurboTax for each one.
What to do: Use the proceeds from our report. In TurboTax, when entering the group for that exchange, use our figures โ not the 1099-DA proceeds.
Most 1099-DA forms issued for Tax Year 2025 report gross proceeds only and leave cost basis blank or show $0. If you filed using those numbers, you would owe taxes on the full proceeds rather than just your actual gain โ potentially paying tens of thousands of dollars more than you owe.
What to do in TurboTax:- When entering the exchange group in TurboTax, check: "The cost basis is incorrect or missing on my 1099-DA."
- Enter the corrected cost basis from our Form 8949 summary sheet for that group.
- TurboTax will calculate gain/loss using the corrected figures.
What to do: Contact us at info@cryptotaxprep.io before making any changes. We'll review the discrepancy and advise whether to use the exchange figure or ours. Do not file with figures you haven't confirmed with us.
Our report has already excluded these from your Form 8949 totals. If the 1099-DA proceeds are higher than our report as a result, that difference is explained by these excluded transfers โ not missing income.
What to do: Use our report figures. If the IRS sends a notice later asking about the discrepancy between the 1099-DA and your return, your BCTP report and the underlying transaction records are your documentation that those were non-taxable transfers.
If you filed using incorrect 1099-DA figures (zero basis, wrong proceeds, or non-taxable transfers counted as sales), you need to file an amended return (Form 1040-X). See Part F for full amendment instructions. If this resulted in overpayment, you may be due a refund โ contact us and we'll walk you through it.
If your PDF tax analysis includes a Section 8 โ Theft Loss Analysis or any mention of IRC ยง165, this section applies to you. If your analysis does not mention theft loss, you can skip this section entirely.
The IRS treats cryptocurrency as property. When crypto is stolen โ via a wallet hack, exchange collapse, rug pull, or similar โ the loss is governed by IRC ยง165, not reported as a capital loss on Schedule D. The relevant provision for most crypto investors is IRC ยง165(c)(2), which allows a deduction for theft losses from transactions entered into for profit.
Under the Tax Cuts and Jobs Act (2017โ2025), personal casualty and theft losses (ยง165(c)(3)) are largely suspended. However, ยง165(c)(2) investment-related theft losses are not suspended and may still be deductible โ potentially as an ordinary loss with no annual cap, which can significantly reduce taxable income.
| Authority | What It Means for You |
|---|---|
| IRC ยง165(c)(2) | Deduction for theft losses from profit-motivated transactions (investing) |
| IRC ยง165(e) | Theft loss is deductible in the year of discovery, provided no reasonable prospect of recovery exists |
| Treas. Reg. ยง1.165-8 | Loss amount = adjusted cost basis of stolen assets; FMV after theft is treated as zero |
| IRS CCA 202302011 | Crypto theft is governed by IRC ยง165 โ NOT ยง1001; no Schedule D capital loss |
| IRS CCA 202511015 | 2025 IRS guidance: profit-motivated crypto theft may qualify under ยง165(c)(2) |
| IRS Tax Topic 515 | Casualty, disaster, and theft losses โ reported on Form 4684 |
| Notice 2014-21 | Cryptocurrency is property for federal tax purposes |
Under ยง165, the deductible amount is your adjusted cost basis in the stolen assets โ what you originally paid for them โ not the market value at the time of theft. If you purchased Bitcoin in 2019 for $5,000 and it was stolen when worth $50,000, your deductible loss is $5,000, not $50,000. The difference represents unrealized appreciation that was never taxed and therefore cannot be deducted.
Your PDF tax analysis includes a detailed table showing the cost basis and market value for each stolen asset, along with the methodology used to calculate each figure. Review Section 8 of your PDF for your specific numbers.
Before claiming the ยง165(c)(2) deduction, your CPA must evaluate two things:
- Profit motive: Were the stolen assets held for investment or profit? For most crypto investors, yes โ but this must be established based on your specific facts.
- No reasonable prospect of recovery: As of December 31 of the tax year, was there no realistic chance of recovering the stolen assets? If the theft involved an untraceable hack or abandoned protocol, this is typically satisfied.
If both factors are met, the deduction may be available. If either is in doubt, the deduction should not be claimed without further analysis.
- The theft transaction hash(es) from the blockchain
- On-chain records confirming the unauthorized transfer
- Your PDF tax analysis (Section 8 โ Theft Loss Analysis)
- Original purchase confirmations or exchange records establishing cost basis
- Any police reports, exchange communications, or incident reports filed
- Documentation of no recovery as of December 31 of the tax year
When using the Sales Section Totals method (which we always use), the IRS requires you to mail your full transaction detail within 3 business days of your e-filed return being accepted.
irs.gov. Fill in your name, SSN, and tax year.Attn: Shipping and Receiving, 0254
Receipt and Control Branch
Austin, TX 73344-0254