GeorgeM777
Expert Alumni

Get your taxes done using TurboTax

It appears you are correct.  The GBTC holds no assets other than BTC tokens.  Accordingly, when expenses are incurred, Trust assets (i.e., BTC tokens) are sold to cover the expenses. 

 

Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro rata share of the underlying assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro rata shares of the Trust’s income and proceeds, and directly incurred their pro rata share of the Trust’s expenses.

 

In order to calculate your 2021 taxable gain or loss from the sale of BTC to cover Trust expenses, you need to obtain the 2021 Grantor Trust Tax Information document.  That document will provide examples and a step-by- step process on how to determine your cost basis and any taxable gain or loss based on the data you have in your 1099-B.  Unfortunately, while we could access the 2020 Grantor Tax Information document, we could not locate the 2021 version of such document because access was denied.  However, you as a Shareholder in the Trust may have access to such document.  

 

When you are able to apply the step-by-step process as explained in the 2021 Grantor Tax Information document, you will then have the information you need to enter into TurboTax.  In other words, it appears that your 1099-B just reflects gross proceeds from the sale of BTC; however, you don't know what cost basis you had in the BTC that was sold to cover Trust expenses.  That is why you need to first obtain the 2021 Grantor Tax Information document.  

 

@jiehuahuang2018

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