Introduction
Navigating cryptocurrency taxes can be overwhelming, especially when using platforms like Kraken. Understanding what activities are taxable, what forms you may receive, and how to properly report your transactions is essential for staying compliant with the IRS.
This guide breaks down everything you need to know about reporting your Kraken crypto activity on your 2024 tax return.
What Kraken Activity Do You Need to Report for Taxes?
If you used Kraken in 2024, certain transactions may need to be reported on your tax return. Some examples of taxable activity include:
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Selling or trading crypto – Any sale, trade, or conversion of one cryptocurrency into another triggers a capital gains tax event.
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Earning rewards – Includes opt-in staking rewards, referral rewards, and other incentive-based earnings.
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Receiving airdrops – Any tokens received through an airdrop are considered taxable income based on their fair market value at the time of receipt.
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Earning interest – If you earned interest on fiat or crypto deposits, this is considered taxable income.
What Kraken Activity is Not Taxable?
Not all Kraken transactions result in taxable events. The following are not subject to tax:
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Buying and holding cryptocurrency – Simply purchasing crypto and holding it in your Kraken account or wallet does not create a tax obligation.
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Transferring crypto between wallets or exchanges – Moving digital assets between your Kraken account and other wallets or exchanges is not considered a taxable event.
While these activities are not taxable, maintaining records of all transactions is necessary to ensure accurate reporting.
What Kraken Tax Forms Will You Receive?
Kraken may issue tax forms based on your activity and income thresholds. Here are the most common tax forms Kraken provides:
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Form 1099-MISC – Issued if you earned $600 or more in rewards, staking, or airdrops.
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Form 1099-INT – Issued if you earned $10 or more in interest from fiat loans. Interest earned on crypto loans will appear on Form 1099-MISC instead.
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Form 1099-NEC – Issued if you performed services for Kraken and earned $600 or more in compensation.
Why Doesn’t Kraken Issue Form 1099-B?
Form 1099-B is typically used for reporting stock and securities transactions, including capital gains and cost basis. However, Kraken does not currently provide this form because it cannot accurately track cost basis across multiple exchanges and wallets used by its customers.
Beginning in 2026, Kraken will start reporting trades on Form 1099-DA, a new tax form designed specifically for digital assets.
Why Didn’t You Receive a Tax Form from Kraken?
Kraken is only required to issue tax forms if certain income thresholds are met. If your earnings fall below these amounts, you may not receive a tax document, but you are still required to report taxable transactions on your return.
Filing thresholds for Kraken tax forms:
|
Tax Form |
Minimum Amount Required for Issuance |
|
Form 1099-MISC |
$600 or more in rewards or airdrops |
|
Form 1099-INT |
$10 or more in interest income |
|
Form 1099-NEC |
$600 or more for services performed for Kraken |
Even if you do not receive a tax form, you must report your taxable crypto activity accurately to avoid penalties.
How to Report Kraken Taxes on Your Return
The IRS requires that all taxable cryptocurrency transactions be reported, even if no tax forms were received from Kraken.
Here is how different types of Kraken transactions should be reported:
|
Transaction Type |
Where to Report on Tax Return |
|
Capital gains or losses from selling/trading crypto |
Form 8949 and Schedule D (Capital Gains and Losses) |
|
Interest income from fiat loans |
Schedule B (Interest and Ordinary Dividends) |
|
Staking rewards, airdrops, or referral rewards |
Schedule 1 (Other Income) or Schedule C (if treated as business income) |
For those who actively trade or earn rewards, consulting a tax professional can ensure accurate reporting and maximize deductions.
How to Calculate Crypto Gains or Losses on Kraken
If you sell, trade, or swap crypto on Kraken, you must calculate capital gains or losses for each taxable event.
Steps to Calculate Crypto Gains and Losses:
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Determine Cost Basis – This is the original purchase price of the crypto, including any transaction fees.
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Calculate Sale Price (Proceeds) – The fair market value in USD at the time of sale or trade.
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Subtract Cost Basis from Sale Price – The difference determines your capital gain (profit) or capital loss (loss).
Example:
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Purchased 1 BTC for $30,000
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Sold 1 BTC for $50,000
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Capital Gain = $50,000 - $30,000 = $20,000
This gain must be reported on Form 8949 and Schedule D.
How to Download Your Kraken Transaction History
To accurately report your taxes, you may need to export your Kraken transaction history. Follow these steps:
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Log in to your Kraken account and go to the Transactions tab.
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Filter your transactions based on the type of report you need.
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Click Export and select the desired file format (CSV is recommended).
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Save and review your transaction history for reporting purposes.
Some crypto tax software can integrate with Kraken for automated tracking, but manual verification is always recommended.
Why You Should Start Reporting Crypto Taxes Now
If you have not reported crypto activity in previous years, it is important to start now. The IRS has increased its enforcement efforts, and new regulations in 2025 and beyond will enhance reporting requirements for exchanges like Kraken.
Key Reasons to Prioritize Tax Compliance:
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Avoid IRS audits and penalties – Failure to report crypto taxes can lead to fines and legal consequences.
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Offset gains with losses – Reporting capital losses can help reduce taxable income.
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Stay prepared for new regulations – With upcoming changes to Form 1099-DA, tax reporting will become even more transparent.
How a Professional Can Help with Kraken Taxes
For many crypto investors, tracking and reporting Kraken transactions can be time-consuming and complex. An experienced tax professional can:
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Ensure all transactions are accurately reported.
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Identify deductions and tax-saving opportunities.
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Defend against IRS audits or inquiries.
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Provide guidance on evolving crypto tax regulations.
If you need assistance with filing your Kraken taxes or understanding your tax obligations, contact a cryptocurrency tax professional for support.
Conclusion
Kraken users must report all taxable cryptocurrency transactions, even if they do not receive a tax form. Understanding capital gains calculations, income reporting, and upcoming regulatory changes is essential for staying compliant with IRS rules.
By accurately tracking transactions and seeking professional guidance, Block3 Finance can assist avoid penalties and optimize their tax positions.
If you have any questions or require further assistance, our team at Block3 Finance can help you.
Please contact us by email at inquiry@block3finance.com or by phone at 1-877-804-1888 to schedule a FREE initial consultation appointment.
You may also visit our website (www.block3finance.com) to learn more about the range of crypto services we offer to startups, DAOs, and established businesses.