Your Guide to Reporting Digital Assets Transactions on 2024 Tax Returns

ARTICLE | March 14, 2025

Authored by Vasquez + Company

Digital assets have rapidly gained popularity in recent years, both among individual enthusiasts and businesses looking to leverage new technologies. As these assets continue to expand their reach, so does the attention of the Internal Revenue Service (IRS). Agencies have begun scrutinizing cryptocurrency and other digital asset transactions to ensure that taxpayers accurately report any gains, losses, and other activity for federal income tax purposes. If you hold or use assets like Bitcoin, stablecoins, or nonfungible tokens (NFTs), it’s crucial to understand how the IRS classifies and taxes these holdings to avoid costly penalties down the road.

This guide is intended to provide clarity on how digital assets are categorized for tax purposes, how to properly account for gains and losses, and what steps you can take to ensure that your 2024 tax return accurately reflects your digital asset transactions. By following these guidelines and staying informed about ever-changing regulations, you’ll be in a much stronger position to navigate this evolving area of tax compliance and steer clear of IRS complications.

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Staying on top of digital asset transactions is no longer optional. Accuracy in your calculations and reporting of gains and losses is paramount if you hope to avoid costly errors and potential IRS scrutiny. The digital asset space continues to evolve, and regulations can shift with little notice, so it’s best to remain updated on all available guidance from the IRS and related authorities.

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.