How do I add a 1099 DA cash form to my amended return for my self employment income?

[goldenboycuzo]

I was paid in bit coin for some of my work and had to sell it for the cash value I also paid for some supplies and equipment the same way

[RobertB4444 · Accepted solution]

This involves three separate entries.  

For the first, on your schedule C where you are reporting your self-employment income, you are going to enter the amount that you billed for services that you received the bitcoin for as though you had been paid in cash for it.  

Second, as far as the equipment that you purchased with bitcoin - the bitcoin is already shown as income on your schedule C because you put the cash amount that you would have received in as income.  So now the expense goes in as the amount that you were billed for the purchase just as though you had paid cash for it.  

Last, you will go to the investment income section and enter the 1099-DA into the system to show the sale of the bitcoin.  You're going to have to enter the price that you paid for it and the date that you purchased it as well as the price that you sold it for and the date that you sold it.  The price that you paid for it is the same amount that you entered above (the amount you originally billed for your services) minus the cost of the equipment that you paid for.  The date that you purchased it is the date that you received it.

When you sold the bitcoin you either made a profit or lost money.  If you made a profit that is taxable.  If you lost money you get to deduct the loss.