This sounds like the bitcoin was your gambling winnings. This means you cannot claim your betting cost as the cost basis, but if you are taking the itemized deduction instead of the standard deduction, you can take a deduction for your gambling expenses. Gambling expenses are only deductible up to the amount of your winnings.
If you are itemizing your return you will take the following steps to deduct your gambling expenses:
- Federal
- Income and Expenses
- Show More next to Less Common Income
- Start next to Gambling Winnings
- Enter your gambling winnings click continue
- After entering all of your winnings, you will be asked for your gambling losses. Enter the bet amount on that page.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
