The IRS considers cryptocurrencies, including Bitcoin, to be ?intangible property.? Investors and traders holding cryptocurrency as a capital asset should use capital gain or loss tax treatment on sales and exchanges, with the realization method. Generally, when taxpayers have engaged in Bitcoin transactions, Form 8949 should be included along with 1040 Sch D of 1040. Per the instructions set forth for a Sch D of 1040 filing, you need to use Form 8949 to report the sale or exchange of a capital asset not reported on another form or schedule. You need to omplete all necessary pages of Form 8949 before you complete sch D of 1040 .