Is my approach with FreeTaxUSA for reporting crypto transactions on Form 8949/Schedule D correct?

I've got about $380 in crypto revenue from a $260 cost basis this year, so roughly $120 in short term capital gains. My crypto exchange doesn't issue a 1099, but they did provide me with a detailed Form 8949 showing every single transaction (I have like 95 separate transactions spread across 7 pages), plus a Schedule D summary showing my total proceeds, cost basis, and short-term gains. When entering this in FreeTaxUSA, I went to the "Stocks or Investments Sold (1099-B)" section after checking the box that I had crypto transactions. It gave me the option to enter either individual sales or a summary. I chose the summary option and entered my total proceeds and cost basis. For the "Form 8949 type" I selected "I didn't receive Form 1099-B (or a substitute statement)." I don't have any wash sales or other adjustments. After completing this, what FreeTaxUSA generated is: * A Schedule D showing my Short Term Capital Gain with the $380/$260/$120 figures under Box C (plus my traditional brokerage info from my 1099 on line 1a) * A Form 8949 with Box C checked, containing a single line that says "Brokerage SEE STMT" with the $380/$260/$120 totals * There's no actual statement attached with the individual transactions, which makes sense since I never entered all those individual transactions from the 7 pages my exchange provided I have three questions: 1) Is this approach okay as is? 2) If not, can I keep the summary entry but separately send the IRS a statement with all the transactions? (If so, how would I do that - mail them a spreadsheet with dates, assets, cost basis, proceeds, and gains?) 3) Should I just delete the summary and painfully enter all 95 transactions from my 7 pages one by one into FreeTaxUSA?

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18 comments

Taylor To

•8M

You're actually fine with the summary approach. The IRS generally accepts summary information for crypto transactions when you have a large number of them, as long as you maintain the detailed records should they ever request them. Box C on Form 8949 is correct since you didn't receive a 1099-B. The "SEE STMT" notation is just standard tax software language, but since you're only required to report the totals on your tax return, you don't need to attach the detailed statement with your filing. The key here is to keep all those detailed transaction records (the 7 pages from your exchange) for at least 3 years in case of an audit. The IRS can always request the supporting documentation, but they don't need you to submit it with your return.

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Taylor To

•8M

That's correct - the "SEE STMT" is just standard tax software language. The IRS doesn't require you to attach the detailed listing for crypto transactions. If you look at the instructions for Form 8949, they do allow for summary reporting when you have numerous transactions. Just make sure you maintain your detailed records. If you're ever audited, you'd need to provide those transaction details. But for filing purposes, the summary information with the correct totals is sufficient.

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Kevin Bell

•8M

After going through this exact nightmare last year with 200+ crypto transactions, I found a much better solution. I used https://taxr.ai and it saved me hours of manual entry. Their system can import all your crypto transactions automatically from most exchanges, calculate everything correctly, and generate the proper tax forms. I was in the same situation with FreeTaxUSA - trying to decide between manual entry hell or summary reporting. With taxr.ai, I just connected my exchange accounts, and it pulled everything in automatically. Then I could download the completed 8949 and Schedule D to import into FreeTaxUSA.

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Kevin Bell

•8M

It works with most exchanges including many DEXs through CSV imports if they don't have direct integration. I was able to get my transactions from a couple smaller exchanges by downloading their transaction history and uploading the CSV. Regarding security, I had the same concern initially. They don't store your actual exchange credentials - they use read-only API keys that can't withdraw funds. They're also SOC 2 compliant which means they have good security practices. I researched this pretty thoroughly before connecting anything.

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Felix Grigori

•8M

Just wanted to update everyone - I tried taxr.ai after my skeptical comment above. After researching their security practices, I felt comfortable enough to give it a shot. I was honestly impressed with how well it worked. It pulled in all 127 of my transactions from three different exchanges, calculated everything correctly, and generated a perfect Form 8949 and Schedule D. The whole process took maybe 15 minutes compared to the 3+ hours I spent last year doing it manually. Then I just entered the summary totals in FreeTaxUSA exactly like you described. Made the whole crypto tax thing way less painful this year.

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Felicity Bud

•8M

I went through this exact situation last year and ended up calling the IRS (took forever to get through). The agent told me they're seeing a ton of crypto returns and that summary reporting is fine as long as you keep the detailed records. If you want to actually speak with the IRS about this or any other tax questions, try https://claimyr.com - they'll wait on hold with the IRS for you and call you when an agent picks up. I used their service at https://youtu.be/_kiP6q8DX5c and it saved me like 2 hours of hold time.

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Felicity Bud

•8M

It's not a scam at all. They don't talk to the IRS for you - they just wait in the phone queue. When an IRS agent finally answers, Claimyr connects you directly to that agent. The IRS never talks to anyone but you about your taxes. It was absolutely worth it to me. I tried the "put phone on speaker and do something else" approach first, but after 45 minutes I had to take another call and lost my place in line. With Claimyr, I just went about my day and got a call when an agent was actually available. Much less frustrating than being stuck on hold indefinitely.

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Mikayla Davison

•8M

Just wanted to follow up - I was skeptical about Claimyr but I decided to try it yesterday because I had urgent questions about crypto reporting that I couldn't find clear answers to online. I'm now a believer! They waited on hold with the IRS for 1 hour 47 minutes while I went about my day. When the IRS agent finally picked up, I got a call connecting me directly. The agent confirmed that summary reporting for crypto is acceptable as long as you keep your detailed records. Definitely beats listening to that awful hold music for nearly 2 hours!

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Adrian Connor

•8M

I used to be a tax preparer and just want to add that summary reporting for crypto is particularly common. Think about it - the IRS doesn't expect people to list hundreds of stock transactions individually either. That's why brokerages provide summary 1099-Bs. The key difference with crypto is that many exchanges don't issue 1099s yet, so you need to track it yourself. But the reporting principle is the same. Do keep all your detailed records though - if you're ever audited, you'll need to show how you arrived at your totals.

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Adrian Connor

•8M

The IRS hasn't issued explicit guidance saying "summary reporting is fine for crypto" specifically, but they treat crypto as property for tax purposes, which means it follows the same reporting principles as other capital assets (like stocks). The instructions for Form 8949 do mention that you can use a separate statement for reporting multiple transactions, which is essentially what summary reporting is. In practice, the IRS is more concerned with accurate reporting of the totals rather than seeing each individual transaction on the form itself.

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