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How does it handle crypto? So far the tax solutions I've seen are cost prohibitive, getting quickly more expensive as the number of transactions being tracked i
by jnsie 5y ago
How does it handle crypto? So far the tax solutions I've seen are cost prohibitive, getting quickly more expensive as the number of transactions being tracked increases.
- sytelus 5y agoWhy is crypto so special? Don't you just report realized gains as investment income and let the tax software do its thing?
- itake 5y agoHow do crypto concepts like lending, staking, and stable coins come into play? If someone "gives" you an altcoin (for staking or lending), is that considered capital gains or income? How do you value the "altcoin"?
- teraflop 5y agoThere are different kinds of "investment income". Selling cryptocurrency (or exchanging one currency for another) generally results in capital gains, for which you need to track and report each individual tax lot along with its cost basis. In contrast, if you receive a bunch of interest or dividend payments from stocks that you own, you generally only need to report the total from each brokerage or other account.
- junar 5y agoA broker typically sends both you and the IRS a 1099-B reporting the details of the sale of stocks, etc. Having this form makes your tax filing relatively easy. Cryptocurrency exchanges don't necessarily issue these forms, which means that the taxpayer has to report the details themselves. In particular, the IRS wants each transaction reported on a separate row of Form 8949, which may be laborious for those with many transactions. (Note that an acceptable alternative is summarizing on Form 8949 itself and attaching details of the individual transactions separately. See "Exception 2" at https://www.irs.gov/instructions/i8949#idm140393400093152 https://www.irs.gov/instructions/i8949#idm140393400093152)
- pokoleo 5y agoYou should use cointracker: https://www.cointracker.io/ https://www.cointracker.io/ If you want to DIY instead, I think it's an invocation of wikihtmltopdf + a simple script that turns CSVs into PDFs.
- not2b 5y agoIf you just buy crypto coins with dollars, hold, and later sell, it's treated the same way as a stock. But if you get paid in BitCoin for services rendered, or you trade one coin for another, that's a taxable event. It's complicated and you probably need a tax expert to do it right (I certainly don't qualify).
- junar 5y agoShort answer is that it doesn't. Form 8949 has zero support.