Apologies if this topic has been covered before or is breaking any rules. Throwaway for obvious reasons.
I feel like I ruined my life by dabbling into cryptos as a clueless college kid.
I first caught wind of it when a buddy of mine said he was going all in on ETH in May of last year. I said hell with it, signed up on Coinbase and threw $5000 into crypto. Mind you this is like half of my life savings, but in the grand scheme of things it’s not too much to lose.
Well, I went down the rabbit hole and struck gold a few times, hitting 10x’s on multiple alt coins… I brought my 5k initial all the way up to a $880k portfolio in December 2017.
Now I should have listened.
I should have cashed out, yes.
Once I hit $1 million I was going to…
I would have been set.
The IRS has recently released new tax guidance for cryptocurrency trading – the first official guidance released in over 5 years, since March 2014. Tyson Cross, a tax attorney who specializes in cryptocurrency taxation, joins me on The BitcoinTaxes Podcast to analyze this new guidance.
In addition to analyzing the new guidelines (and Tyson providing his expertise) we answered some questions from Reddit users as well (starting @ 44:50).
The revenue ruling creates some problems.
The FAQ, for the most part, is not too problematic.
But – I’d say on the net whole, both maybe create more questions than they answer, unfortunately.
Revenue Ruling 2019-24 is what the IRS released and specifically it addresses this issue of hard forks and airdrops, which until now has really gone unanswered.
Once you pass $20K in transactions, Coinbase is required to report your transactions to the IRS. It seems likely tax authorities around the world will follow suit, forcing Coinbase and the other exchanges to do the same for any of their citizens. So we should all be prepared to get taxed.
I started looking into how to do it myself. You have to run several calculations on EVERY transaction between currencies or anytime you buy or sell for fiat. And you have to look up the historical values of your coins for the timeframe of each trade or purchase etc.
I got totally overwhelmed and reached out to a CPA.
They claimed to know about crypto taxes, but didn’t know what a fork or an airdrop was, so I knew he was trying to scam me.
Then I started looking for software solutions. I found bitcoin.tax, cointracking.info and ZenLedger.io.
Whether you are new to crypto or have experience filing your crypto taxes, here are 5 very important things to note for your 2018 tax filings.
For each taxable crypto event, a calculation must be made to determine whether you have a capital gain or loss to recognize. These gains/losses are reported on your tax forms.
If your crypto activity results in a net loss for the tax year, you can use that loss to deduct up to $3,000 against your taxable income. If you have losses in excess of the $3,000 that can be deducted against your taxable income, the excess losses will be carried forward to the next year.
The losses that have been built up can be used to reduce capital gains in the subsequent year. In addition, the losses can also be used to reduce another $3,000 against the following years taxable income.
Hop on bitcoin.tax and upload all of your trades, if you made over 100 trades in 2017, you will need to purchase the 40ish dollar premium license.
After you’ve uploaded all of your trades into bitcoin.tax, (For upload, you have the option of manual entry, .csv upload, or API link) you will need to save everything as a .txf file. In order to do this you will need to go to Reports & Export =>Download => and finally “Turbotax CD/Download / H&R Block.” This will save your 2017 trade history as a .txf file.
Unfortunately, the only way you can upload your trades to Turbotax is by buying a physical copy of the software. I bought the Premier Version ($70,) it’s geared towards those with investments.
I first learned about the tax implications that come with cryptocurrencies in the US earlier this fall (about September time frame). At the time, I was down around $32,000 total from when I first got involved in crypto about a year prior (yes I did buy the hype and I’m paying for it now).
I was blown away after I learned that because the stuff is treated as property for tax purposes, I somehow needed to report EVERY SINGLE trade that I have ever made to the government. I also needed to know the US dollar value of the cryptocurrencies that i was trading at the time of each individual trade to properly report everything. For someone like me who has done A LOT of trading, this is literally IMPOSSIBLE. Seriously there has to be a better way to tax this stuff cmon…
I’ve been seeing ads for Happy Tax everywhere, but it would cost me $850 plus at least $300 in “add-ons” to cover my situation. $1000 bucks? Is that really my best option?
My original CPA won’t handle crypto, and the other firm I talked to seemed to know nothing about crypto tax law.
I got a free account at contracting.info, but the UI is difficult and their customer support is sloooooow. It’s cheap but it feels like I’ll spend HOURS trying to figure this out!
When I look at these software options: cointracker, contracting.info, zenledger.io, tokentax … they all have different accounting methods. I want to pay the least taxes possible, but I also want to do it right!
The requirements to find cost basses for every coin for every trade is nuts.
Tax season is upon us, and data shows that the vast majority of cryptocurrency investors don’t understand how to report their crypto trades, earnings, or losses on their taxes.
The IRS opened their e-filing on January 28th and many people are now filing their taxes.
While the new tax laws have changed a few things this year, most rules regarding cryptocurrencies have remained the same.
If you are new to including cryptocurrency in your tax returns, or just could do with a refresher, here are 10 useful pieces of information.
A tax event occurs whenever you dispose of any cryptocurrency.
For each event, you have to calculate if you made or lost any money.
These are declared as capital gains/losses (Schedule D) on your tax forms.
selling crypto for fiat currency, e.g. trading it on an exchange for dollars
trading one crypto for another, e.g.
Guys, do you have any recommended site who could help with US Taxes on Crypto Income/Loss for year ending 2018.
Reviews are welcome based on charges, number of transactions included, wallet support, CSV/API imports, methods for calculation like FIFO/LIFO etc…
Bitcoin.tax worked well for me last year.
It has FIFO/LIFO and a couple other reporting methods.
They can import your trades from almost any exchange and generate your tax documents into a PDF for download.
So far seems to be good for the value. Do they allow excel upload for the basic plan, please?
I like http://tokentax.co. It supports all exchanges and wallets via CSV/API importing and it calculates FIFO, LIFO, or minimization (specific shares), and it tells you which accounting method has the lowest tax liability.