Yes. That is a capital gain. Each trade must be reported separately, each trade being either a gain or a loss.
Stockbrokers issue a form 1099-B that tracks the purchase price and sales price of your stocks to make tax reporting easier. Because cyrptocurrency exchanges are not required to do this, you need to keep really good records of all your transactions so you can determine the cost basis of the coins you convert to cash or tangible assets. If you are audited and don't have adequate proof of your basis, the IRS can determine that the entire proceeds is a taxable gain.
Capital gains/losses are reported as part of Schedule D. Here’s what to do:
1. Sign in to TurboTax and select the Take me to my return
2. Search for “Schedule D” and then select the “Jump to” link in the search results.
3. Now follow the screens to enter your info.
When recording your transactions include:
· When you acquired the coins and how much you paid.
· When you sold the coins and how much you received.
You must do this for every trade you made. If you bought coins at different prices or sold partial amounts, then you must keep track and record the difference of what you sold. You can do this yourself in Excel or another spreadsheet. There are also new services that are specializing in the conversion, which you can find online. You can import all your trading, spending and mining, and then create a file to import or include with your taxes.
