Traded crypto but never sold to USD. Only have coin-to-coin transactions. How do I begin to document the gains and losses, or can I just be taxed on capital gains?

[TomYoung · Accepted solution]

Each coin to coin trade is considered a taxable, reportable sale.  Your "proceeds" from each sale is translated into USD at the spot price in effect at the time of of the trade.  That USD amont then is the basis of the new coin when it is sold.

You report these sales using the "Stocks, Bonds,  Mutual Funds,  Other" interview,  telling TT that no 1099-B was received.

Tom Young

[cryptotax]

How does one get the exact value in USD of each trade? The value of the coins fluctuate minute to minute. Is this something TT does for you?

[TomYoung]

No, TT isn't going to do that for you, you have to do that on your own. A coinbase number close to the time of the trade would probably be OK.  For your past trades there are sites that present historical quotes for the major crypto currencies.

[chrislymbertos18]

But I am confused. If you buy 1000 USD worth of BTC then trade for the equivalent number of LTC immediately and never sold, how are there "proceeds" from the sale?  If anything there would be a loss of proceeds due to fees being taken out. Additionally, you still own roughly about 1000 USD worth of coins. So why would I report this trade? My scenario leads me to believe I shouldn't report anything until I have sold LTC and like you mentioned above use the LTC USD amount as my new basis on when the coin is sold

[TomYoung]

The conversion from one crypto currency to another is a sale by definition and nothing says that you can't have a loss.  In your case you do have a loss because your NET proceeds is less than your cost.  The net proceeds are the new coin's basis.