How to Declare Bitcoin and Cryptocurrency on Your Income Tax Return

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Filing taxes on cryptocurrency can feel counterintuitive for many enthusiasts. After all, if digital assets are decentralized, why report them to central authorities? However, complying with tax regulations isn’t just a legal requirement—it’s a way to avoid penalties and ensure peace of mind.

This guide breaks down the essentials of reporting and taxing crypto assets, specifically for the 2025 tax year. Whether you're holding, trading, or earning crypto, understanding these rules will help you stay compliant and organized.

Understanding Crypto Tax Obligations

In many jurisdictions, including Brazil, cryptocurrency is treated as property for tax purposes. This means you’re required to report your holdings and any taxable events, such as selling or exchanging crypto.

Failing to do so can lead to fines, audits, or other legal complications. Proper record-keeping and accurate reporting are your best defenses against these risks.

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How to Access Your Crypto Transaction Data

To accurately report your crypto activities, you need detailed records of all your transactions throughout the year. This includes trades, transfers, sales, and purchases.

Using the Web Platform

  1. Navigate to the Assets section.
  2. Select Order Center.
  3. Choose between Trading History or Account Statement.
  4. Use the date filter to select the desired period.
  5. Click Download to save your records.

Using the Mobile App

  1. Open your Portfolio.
  2. Tap the Transactions icon.
  3. Select Download in the upper right corner.
  4. Pick your date range.
  5. Download your history.

These monthly statements help you track transactions and calculate gains or losses efficiently.

Using the Annual Income Report

Starting in 2024, many platforms introduced an annual Income Report feature. This document summarizes your asset positions as of December 31 and includes the average acquisition cost for each holding.

This report is designed to simplify the process of declaring assets and rights in your annual tax return.

Accessing the Report on Web

  1. Hover over Assets.
  2. Click My Assets.
  3. Select Tax Center.
  4. Download the PDF report.

Accessing the Report on the App

  1. Open the main menu.
  2. Scroll to More and select Tax Center.
  3. Tap to download the PDF.

This tool is especially useful for ensuring accuracy and saving time during tax season.

How to Declare Crypto on Your Tax Return

If you held cryptocurrencies worth more than R$5,000 (or the equivalent in your local currency) as of December 31, you must declare them in your annual tax return. This is typically done in the "Assets and Rights" section under a specific crypto category.

Common classification codes include:

Declaration is required even if you didn’t sell any assets during the year. It simply reports your holdings as of the year-end date.

When Are Crypto Gains Taxed?

You only owe taxes when you realize a gain—usually through selling, trading, or spending crypto. Simply holding crypto isn’t a taxable event.

Tax rates are often progressive. For example:

These thresholds vary by country. Always check local regulations.

Tax payments are typically due by the end of the month following the transaction. Use the appropriate tax form or payment code (e.g., DARF in Brazil).

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Converting Values and Keeping Records

All transactions must be converted into your local currency using the official exchange rate on the transaction date. For example, in Brazil, the Central Bank’s PTAX rate is used.

Keep detailed records of:

Good documentation is essential in case of an audit.

Who Is Responsible for Reporting?

While many exchanges report user transactions to tax authorities, the ultimate responsibility for accurate reporting lies with you, the investor.

Exchanges may provide data to regulators, but it’s your job to ensure everything is correctly declared on your personal tax return.

Penalties for Non-Compliance

Failing to report crypto assets or gains can result in:

To avoid these risks, consider consulting a tax professional who specializes in cryptocurrency.

Frequently Asked Questions

Do I need to declare crypto if I didn’t sell any?
Yes, if your holdings exceed the minimum threshold set by your tax authority. Declaration of holdings is separate from taxation of gains.

How do I calculate capital gains on crypto?
Subtract the acquisition cost from the sale price for each transaction. Use the official exchange rate on the date of each transaction for conversion.

What if I traded one crypto for another?
In most jurisdictions, crypto-to-crypto trades are taxable events. You must calculate the gain or loss in your local currency at the time of the trade.

Are stablecoins considered cryptocurrencies for tax purposes?
Yes, stablecoins are generally treated like other cryptocurrencies and must be declared.

What records should I keep?
Maintain detailed logs of all buys, sells, trades, transfers, and receipts. Keep these records for at least 5–7 years.

Can I use software to help with crypto taxes?
Yes, many platforms offer tools that automate transaction tracking, gain calculation, and tax form generation.

Final Tips for a Smooth Tax Season

Declaring cryptocurrency doesn’t have to be stressful. With careful planning and the right tools, you can meet your tax obligations confidently and avoid unnecessary complications.