What is the best way to file cryptocurrency sales ...
jordanwhalen
New Member

What is the best way to file cryptocurrency sales if you received the cryptocurrency as a payment?

I received an amount of cryptocurrency as payment for work I did on a project. It for was for a friend so I was willing to gamble on it. If I had charged my normal rate for the work and been paid in USD, it would have totaled up to around $3000. At time of receiving the cryptocurrency it was worth right around $650. I sold it off slowly through early last year for a total of just under $9,000. Im not sure how best to file this as I didnt purchase it, any advice would be much appreciated!
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TomK
New Member

Get your taxes done using TurboTax

Please read the TurboTax FAQ for more information on "How do I report Bitcoin or other cryptocurrency as a capital gain?":  How do I report Bitcoin or other cryptocurrency as a capital gain?

To enter/edit/add cryptocurrency:

  1. Open your return (if not already open).
  2. Click on “Take me to my return” if applicable.
  3. Search for "cryptocurrency" in the search box.
  4. Click on the “Jump to cryptocurrency” link.
  5. If you land on a Summary page, just click "Add" or on the Pencil icon to edit that form or on the Garbage can to delete that form.

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CryptoTraderTax
Returning Member

Get your taxes done using TurboTax

Crypto received as a form of income will be treated two ways for tax purposes.

1. As taxable income at the fair market value at the time it was received.

2. As capital gains loss once you dispose of it (sell or trade)

So in this case, you had taxable income of $650 from receiving it, and capital gains for every time you sold some of the held cryptocurrency. 

An easy way to track all of this, and to automatically determine capital gains/losses and fair market value is to use a one of TurboTax's cryptocurrency tax partners.

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