What records do I need to keep for crypto taxes?

Maintaining comprehensive records of all cryptocurrency transactions is essential for accurate tax reporting and for defending your positions in the event of an IRS audit. The IRS expects taxpayers to maintain records that allow them to calculate gain or loss on every disposition of cryptocurrency.

For every transaction, you should record: the date and time of the transaction, the type of transaction (buy, sell, exchange, receive, send, stake, etc.), the amount of cryptocurrency involved (in units), the fair market value in US dollars at the time of the transaction, the cost basis if disposing of crypto, any fees or commissions paid, the exchange or platform where the transaction occurred, and the wallet address(es) involved.

For acquisitions specifically, record: the purchase price per unit in USD, the total cost including fees, the date acquired (this determines your holding period), and the source (exchange purchase, mining reward, airdrop, payment for services, etc.).

For dispositions, record: the proceeds received in USD, the cost basis of the specific units disposed of, the method used to determine which units were sold (FIFO, specific identification, etc.), and the resulting gain or loss.

For DeFi activities, maintain additional records: smart contract addresses interacted with, LP token minting and burning transactions, staking deposits and withdrawals with reward amounts, lending platform deposits and interest earned, and token approvals and revocations with associated gas fees.

Practical tools and approaches: use crypto tax software such as CoinTracker, Koinly, CoinLedger, or TaxBit that can connect to exchanges via API and import transaction data; download CSV transaction histories from every exchange regularly (exchanges may limit historical data availability); take screenshots of wallet balances and token prices for significant events; maintain a separate record of airdrops, forks, and other non-purchase acquisitions; and keep records for at least 7 years (the IRS typically has 3-6 years to audit, but international returns may have an indefinite statute).

At Zenith Financial, we work with all major crypto tax software platforms and can import your transaction data to prepare accurate tax returns. We recommend using one of these platforms year-round to make tax time smoother.