The Form 1099K is not an "entry" document. For your cryptocurrency account, you enter your transactions that were sold. It is treated like an investment sale for tax purposes, and should be divided between long term and short term transactions. You will need the date purchased, purchase price, date sold, and selling price.
Cryptocurrency is treated like any other asset, stock or
collectible. There are no tax issues when buying. When you sell,
you have either a capital gain or loss, that is taxed as regular income (short
term gain, held one year or less) or lower long term capital gains rates (held
more than 1 year.) Because cryptocurrency exchanges are not currently
required to issue 1099-B statements like a stock broker does, you will need
your own accurate records of your purchases and sales. If you are audited
and can't prove the price you paid, the IRS is likely to declare the entire
amount to be a taxable.
Please use these steps in TurboTax (online or desktop):
- Select the Federal tab
- Select Wages and Income
- Select Investment Income
- You'll
list each trade/sale in the Stocks, Mutual
funds, Bonds, Other interview
- When
asked "Did you get a 1099-B or a brokerage
statement for these sales?" select No
- When asked
to Choose the type of investment you
sold select Everything else
- Translate
proceeds of each sale into US dollars at the time of the sale
- Repeat for
each gain (you can consolidate for one short term sale and, if applicable, one long term sale).
For more information about
cryptocurrency see below.
