A
B
C
F
G
M
N
O
P
S
T
U
There is no one clear rule that says how every single one of your cryptocurrency transactions should be taxed. Instead, the IRS periodically releases guidelines to help you understand your obligations.
Our Head of Tax, Nick Waytula, reviewed these guidelines to help produce this comprehensive guide to crypto taxes in the US, alongside our expert writing team.
Is there a free version?
Yes, CoinLedger offers a free version with portfolio tracking and unlimited transactions. To gain access to any reports, you’ll need to upgrade to a paid plan.
DIY Plans
Professional Consultation Plans
Is there a free version?
Yes, you can import your crypto transactions for free. However, to view, download, or access reports, you need to upgrade to a paid plan.
Is there a free version?
Yes. Koinly provides a limited free version that allows you to track your portfolios. For access to any reports, you’ll need to upgrade to a paid plan.
Is there a free version?
No free version available.
Summ also offers a 30-day, 100% money-back guarantee. If you’re not satisfied, you can receive a full refund by contacting the support team.
Yes, Summ is free to use instantly when you sign up, allowing you to gain a full picture of your crypto portfolio, with support for up to 100,000 transactions. Take advantage of the smart suggestion and auto-categorization engine, portfolio tracking, unlimited integrations, DeFi and NFT support.
To access the reports, the tax loss harvesting tool and priority support, you will need to upgrade to the appropriate paid plan.
In most cases of buying and selling cryptocurrency as a retail investor, you are participating in investing rather than trading. The two are treated differently for tax purposes.
The key difference between investing and trading – along with the different tax treatments, is how losses generated in the crypto-activity can be used.
In their guidance, HMRC have explicitly stated that they would expect it to be exceedingly rare that any crypto-activity constituting buying & selling crypto would be classified as “trading”.
If you are uncertain, speak to a tax advisor as there are always exceptions, including but not limited to, developing tokens and large scale mining.
You can be liable for both capital gains and income tax depending on the type of cryptocurrency transaction, and your individual circumstances. For example, you might need to pay capital gains on profits from buying and selling cryptocurrency, or pay income tax on interest earned when holding crypto.
For a blockchain enterprise, the journey from a series of smart contract interactions to a legitimate, scalable business entity is defined by its commitment to clear and precise institutional-grade crypto tax and accounting with income, transfers, exchanges and swaps properly recorded and all of this ends up in the final figures as reported by delivery of a Schedule K-1 (Form 1065).
.png)
As part of the strategic partnership with Summ, Saim Akif from AKIF CPA has prepared this educational article to explain the crypto K-1.
For a blockchain enterprise, the journey from a series of smart contract interactions to a legitimate, scalable business entity is defined by its commitment to clear and precise institutional-grade crypto tax and accounting with income, transfers, exchanges and swaps properly recorded and all of this ends up in the final figures as reported by delivery of a Schedule K-1 (Form 1065).
For many crypto funds, mining operations and blockchain infrastructure companies operating as partnerships, the K-1 is frequently viewed as a seasonal administrative hurdle. However, for a professional tax advisor, the K-1 is the essential link connecting the company’s complex on-chain activity to the personal tax returns of every partner. One misplaced number does not just result in a clerical error, it can create a ripple effect of corrections across the entire business.
A partnership is a pass-through entity, meaning the business itself typically does not pay federal income tax. Instead, it passes profits, losses, and credits through to its owners. The K-1 is the official report that tells each partner and the IRS, exactly what their share of that activity is for the year.
In the crypto sector, the K-1 must translate a year’s worth of high-frequency trading, staking rewards, and network fees into specific categories. Accuracy is paramount because different types of crypto income are taxed at different rates. For example, income from staking is often treated differently than a long-term gain from holding a digital asset. On a K-1, where a number is placed is just as important as the number itself.
A significant challenge for crypto businesses is ensuring that on-chain reality matches the financial books. If the company's financial statements are built from unverified data or incomplete exports from exchanges, the K-1 is likely to be flawed from the start.
When a partnership issues an inaccurate K-1, the consequences extend to the partners. If a partner receives a document that doesn't match their own records, they may have to file additional forms to explain the discrepancy to the IRS. This creates friction that can damage the company’s reputation with investors and make it harder to raise capital or attract top talent.
The IRS maintains strict rules regarding the timely and accurate filing of partnership returns. Penalties for late or incorrect filings are calculated based on the number of partners and the length of the delay. For an enterprise with many stakeholders, a simple oversight can quickly turn into a significant financial burden.
As tax authorities increase their focus on digital assets, the pressure on partnerships to provide institutional-grade reporting has never been higher. The goal is to move away from last-minute adjustments and toward a system where the tax return is a natural extension of clean, monthly accounting.
A reliable K-1 begins with a solid accounting process throughout the year. To ensure the business is protected, management should focus on three core areas:
- Complete Data Integration: Every wallet, exchange account, and custodian must be accounted for in the company's books.
- Transaction Clarity: Transfers must be clearly labeled so that the business isn't accidentally reporting internal movements as taxable income.
- Reconciled Ledgers: The company's balance sheet should be regularly checked against actual blockchain balances to ensure that partner capital accounts are tracked with precision.
By prioritizing clear data and professional classification, crypto businesses can protect their partners and build the credibility necessary for long-term growth. As a final reminder, the deadline for partnerships to file and issue these K-1s to partners is March 15.
Summ simplifies crypto tax reporting across 3,500+ wallets, exchanges, and blockchains. It generates precise, accountant-endorsed reports for a wide range of crypto activity, including DeFi and on-chain transactions, helping users stay fully compliant.
AKIF CPA is a team of highly skilled tax professionals with years of experience and expertise in the field of tax, accounting, business advisory, payroll, business consulting, compilation and review services, sales tax audit and financial planning. The team provides comprehensive solutions to small businesses.
The information provided on this website is general in nature and is not tax, accounting or legal advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek professional advice. Summ (formerly Crypto Tax Calculator) disclaims all and any guarantees, undertakings and warranties, expressed or implied, and is not liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or Consequential Loss or damage) arising out of, or in connection with, any use or reliance on the information or advice in this website. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information in this website is no substitute for specialist advice.
Compare the best platforms for managing Form 1099-DA reporting, calculating cost basis, and reconciling exchange data with your actual transaction history.
Coinbase Prime has started issuing Form 1099-DA to U.S. crypto traders for the first time. This quick guide explains what the new 1099-DA means, why you received it, what's missing from the form, and the exact steps you should take next to avoid overpaying on crypto tax.
.png)
Without accurate cost basis information, your crypto tax calculations will be incorrect, which could cost you thousands in overpayment.
Import your transactions and generate a free report preview.
Blog
06 March 2026
X
Min read
For a blockchain enterprise, the journey from a series of smart contract interactions to a legitimate, scalable business entity is defined by its commitment to clear and precise institutional-grade crypto tax and accounting with income, transfers, exchanges and swaps properly recorded and all of this ends up in the final figures as reported by delivery of a Schedule K-1 (Form 1065).
Saim Akif, CPA
This tax guide is regularly updated: Last Update
....
March
6
2026
As part of the strategic partnership with Summ, Saim Akif from AKIF CPA has prepared this educational article to explain the crypto K-1.
For a blockchain enterprise, the journey from a series of smart contract interactions to a legitimate, scalable business entity is defined by its commitment to clear and precise institutional-grade crypto tax and accounting with income, transfers, exchanges and swaps properly recorded and all of this ends up in the final figures as reported by delivery of a Schedule K-1 (Form 1065).
For many crypto funds, mining operations and blockchain infrastructure companies operating as partnerships, the K-1 is frequently viewed as a seasonal administrative hurdle. However, for a professional tax advisor, the K-1 is the essential link connecting the company’s complex on-chain activity to the personal tax returns of every partner. One misplaced number does not just result in a clerical error, it can create a ripple effect of corrections across the entire business.
A partnership is a pass-through entity, meaning the business itself typically does not pay federal income tax. Instead, it passes profits, losses, and credits through to its owners. The K-1 is the official report that tells each partner and the IRS, exactly what their share of that activity is for the year.
In the crypto sector, the K-1 must translate a year’s worth of high-frequency trading, staking rewards, and network fees into specific categories. Accuracy is paramount because different types of crypto income are taxed at different rates. For example, income from staking is often treated differently than a long-term gain from holding a digital asset. On a K-1, where a number is placed is just as important as the number itself.
A significant challenge for crypto businesses is ensuring that on-chain reality matches the financial books. If the company's financial statements are built from unverified data or incomplete exports from exchanges, the K-1 is likely to be flawed from the start.
When a partnership issues an inaccurate K-1, the consequences extend to the partners. If a partner receives a document that doesn't match their own records, they may have to file additional forms to explain the discrepancy to the IRS. This creates friction that can damage the company’s reputation with investors and make it harder to raise capital or attract top talent.
The IRS maintains strict rules regarding the timely and accurate filing of partnership returns. Penalties for late or incorrect filings are calculated based on the number of partners and the length of the delay. For an enterprise with many stakeholders, a simple oversight can quickly turn into a significant financial burden.
As tax authorities increase their focus on digital assets, the pressure on partnerships to provide institutional-grade reporting has never been higher. The goal is to move away from last-minute adjustments and toward a system where the tax return is a natural extension of clean, monthly accounting.
A reliable K-1 begins with a solid accounting process throughout the year. To ensure the business is protected, management should focus on three core areas:
- Complete Data Integration: Every wallet, exchange account, and custodian must be accounted for in the company's books.
- Transaction Clarity: Transfers must be clearly labeled so that the business isn't accidentally reporting internal movements as taxable income.
- Reconciled Ledgers: The company's balance sheet should be regularly checked against actual blockchain balances to ensure that partner capital accounts are tracked with precision.
By prioritizing clear data and professional classification, crypto businesses can protect their partners and build the credibility necessary for long-term growth. As a final reminder, the deadline for partnerships to file and issue these K-1s to partners is March 15.
Summ simplifies crypto tax reporting across 3,500+ wallets, exchanges, and blockchains. It generates precise, accountant-endorsed reports for a wide range of crypto activity, including DeFi and on-chain transactions, helping users stay fully compliant.
AKIF CPA is a team of highly skilled tax professionals with years of experience and expertise in the field of tax, accounting, business advisory, payroll, business consulting, compilation and review services, sales tax audit and financial planning. The team provides comprehensive solutions to small businesses.
The way cryptocurrencies are taxed in most countries mean that investors might still need to pay tax, regardless of whether they made an overall profit or loss. Depending on your circumstances, taxes are usually realized at the time of the transaction, and not on the overall position at the end of the financial year.
In most countries you are required to record the value of the cryptocurrency in your local currency at the time of the transaction. This can be extremely time consuming to do by hand, since most exchange records do not have a reference price point, and records between exchanges are not easily compatible.
You just need to import your transaction history and Summ (formerly Crypto Tax Calculator) will help you categorize your transactions and calculate realized profit and income. You can then generate the appropriate reports to send to your accountant and keep detailed records handy for audit purposes.
We always recommend you work with your accountant to review your records. If you would like your accountant to help reconcile transactions, you can invite them to the product and collaborate within the Summ web app. We also have a complete accountant suite aimed at accountants.
Summ (formerly Crypto Tax Calculator) handles all non-exchange activity, such as onchain transactions like Airdrops, Staking, Mining, ICOs, and other DeFi activity. No matter what activity you have done in crypto, we have you covered with our easy to use categorization feature, similar to Expensify.
Our subscription pricing is per year not tax year, so with an annual subscription you can calculate your crypto taxes as far back as 2013. The process is the same, just upload your transaction history from these years and we can handle the rest.
Yes, Summ is designed to generate accountant-friendly tax reports. You simply import all your transaction history and export your report. This means you can get your books up to date yourself, allowing you to save significant time, and reduce the bill charged by your accountant. You can discuss tax scenarios with your accountant, and have them review the report.
Summ has an annual subscription which covers all previous tax years. If you need to amend your tax return for previous years you will be covered under the one payment.
Summ covers thousands of exchanges, wallets, and blockchains, and DeFi apps, but if you do not see your exchange on the supported list we are more than happy to work with you to get it supported. Just reach out to [email protected] or via the in-app chat support feature and we will get you sorted.
We do! Summ integrates with many NFT marketplaces and offers categorization options for any NFT-related activity (minting, buying, selling, trading).
Summ is free to use immediately upon signup, allowing you to import your transactions and take advantage of our smart suggestion and auto-categorization engine, portfolio tracking, DeFi and NFT support. For access to reports, the tax loss harvest tool or chat and priority support, you will need to upgrade to the appropriate paid plan.
