cryptocurrency

[kemo1a]

I bought and sold a small amount of cryptocurrency in 2020.  Paypal tax center has been down for month they say they are working on it.  My question is would that end up as the same tax document as sale of a stock 1099-b when reported so all I would have to do do is do it as a short sale and input the information?  If it matters when it comes to reporting I made 10 in gains in 2020 and repurchased and still own for 2021.

[DianeW777]

Yes, you can use the 1099B section to enter your cryptocurrency sale (see below). Repurchase is not part of the equation except when the repurchased items are sold at which time the cost basis is needed.  Any gain or loss from actual transfers/sales is reported regardless of what the funds were used for.

• In TurboTax Online you will find Cryptocurrency as a selection under Investment Income
• In TurboTax Desktop you will enter Cryptocurrency as a Stock, Mutual Funds, Bonds, Other, under Investment Income

Be prepared with the following information:

• Service name (examples: Coinbase)
• Asset name (examples: Bitcoin, Ethereum)
• Date of purchase
• Cost basis
• Date of sale
• Sale proceeds

You can do a summary of long term and then short term combinations (long term holding is more than one year, short term holding is one year or less).  Make one entry for each. You can then send the worksheets or statement with Form 8949 after your return is accepted, attached to Form 8453.

• Sale date can be the last date a sale occurred or 12/31/2020
• Purchase date can be 'Various' 

If you are e-filing your tax return, then mail your statements along with Form 8453 to: 

Internal Revenue Service

Attn: Shipping and Receiving, 0254 

Receipt and Control Branch 

Austin, TX 73344-0254

If you need a blank Form 8453, you can download this pdf, enter your address information and check the box for Form 8949 (this form is really just a cover sheet).