DanielV01
Expert Alumni

Investors & landlords

I like what @fanfare suggests because crypto reporting can be extremely complicated to figure out whose investments belong to whom.  Until things are regulated to where crypto exchanges send out documentation to report all transactions, this is still a bit of a manual process.  Many of the exchanges have tools to either download .csv files or even attachable 8949 documents, but they are still manual calculations based on when transactions and initial investments were made, and what method you are electing to use to report the transactions.  (Whether FIFO, LIFO, or some type of optimization, for example). 

 

Splitting that via individual returns is near impossible to do accurately, particularly if you have a lot of transactions.  (It is not uncommon for there to be hundreds of crypto-transactions in a year).  A Partnership would more accurately address splitting, because you claim everything together and then split out the amounts to each, which can be based off of the percentage each invested in, for example.  But as commented above, a Partnership creates a separate return, and if you are going to get married, it would be a lot of extra paperwork for no real tax benefit or "necessity".  

 

However, there is one last factor to consider, and that is how much capital gain one person individually would have to claim.  Depending on the other income of each individual, it is possible that for one person to claim all of the income generated, it could result in a significantly higher tax liability than if you go through the extra work of a partnership or trying to figure out whose income is whose through your personal returns.  As mentioned above, it is probably a good idea to speak with a tax professional in order to make the best overall choice for your situation.

 

@curio1

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