topic Two SuperUsers have given good information on cryptocurre... in Get your taxes done using TurboTax

I made thousands of cryptocurrency trades and would like to avoid entering them manually one by one . I don't see an option to upload a txf file. What options do I have?

dedo79 — Thu, 06 Jun 2019 16:40:42 GMT

I have desktop Turbotax Premier. I have over 7000 crypto...

ycchoy — Thu, 06 Jun 2019 16:40:43 GMT

I have desktop Turbotax Premier. I have over 7000 cryptocurrency trades. TurboTax rejects my import file because of too many transactions. What is the limit of transactions? Is there any way to get around it? Thanks.

Use the "enter a summary '" option which is the same as t...

fanfare — Thu, 06 Jun 2019 16:40:45 GMT

Use the "enter a summary '" option which is the same as the old "i'll mail it in" option. then you will mail your transaction detail report to the IRS office designated for receipt of such material , within three business days of ACCEPTED message.
you may want to explore available options for reporting on media other than paper.

The TurboTax FAQ in the area says that it will accept abo...

TomYoung — Thu, 06 Jun 2019 16:40:45 GMT

The TurboTax FAQ in the area says that it will accept about 2,000 trades PER BROKER. So maybe break the trades into < 2,000 trade groups and enter each group one at a time with a different "broker" name?

IF you have a properly formatted .txf file AND you are us...

TomYoung — Thu, 06 Jun 2019 16:40:45 GMT

IF you have a properly formatted .txf file AND you are using a desktop version of TurboTax THEN you can upload it into TurboTax.

Click File > Import > From accounting software > Other financial software

You can't do that using "online" TurboTax

Using online TurboTax you're pretty much limited to entering summary information and then mailing in "substitute" schedules that have the same Form 8949 information.

I'd guess you didn't get a 1099-B for those trades.

Use the "Stocks, Mutual Funds, Bonds, Other" interview telling TurboTax that no 1099-B was received.
Use the "Everything else" investment type.
Make sure your list reports the same information that a Form 8949 would report, separated between long term and short term holdings, with dollar subtotals for each term:

What was sold
Date of sale
Proceeds of sale
Cost basis
Date of acquisition

On the page "Some Basis Info About This Sale" enter "Summary of ST Crypto Currency Trades " or "Summary of LT Crypto Currency Trades" depending which group you're working on. Enter the total dollar amount of proceeds for each group as appropriate and you can use 12/31/2017 for date of sale.

On the "Tell Us How Your Acquired This Property" page tick "Purchased".
On the "Enter Purchase Information" page enter the summary cost and the word "various" in the Date of Purchase box.
On the "When Was This Investment Acquired" page you'll answer "Yes" for the long term trades and "No" for the short term trades.

If you're mailing in your income tax returns you can include your manipulated substitute for a Form 8949 as part of your filing though I'd add "See Schedule" to your descriptions of what was sold.

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

Form 8453: https://www.irs.gov/pub/irs-pdf/f8453.pdf

Tom Young

Thank you Tom. If I want to e-file, how do I tell TurboTa...

dedo79 — Thu, 06 Jun 2019 16:40:47 GMT

Thank you Tom. If I want to e-file, how do I tell TurboTax that I want to add a "substitute" schedule to the filing? Thanks

There's really no way to do that when you tell TurboTax t...

TomYoung — Thu, 06 Jun 2019 16:40:49 GMT

There's really no way to do that when you tell TurboTax that no 1099-B was received; the programmers just haven't programmed for that.

But that's really not a big deal. All TurboTax does from when you tell TurboTax that you have a 1099-B and want to enter summary information is enter the description "[Broker's Name] - see attached statement" on Form 8949. And the "statement" you send in can be either actually be a Form 8949 if it's available to you or your substitute statement that has the same information.

So if you want, you can add " - see attached statement" to your whatever you choose to enter as the description of what was sold.

thanks!

dedo79 — Thu, 06 Jun 2019 16:40:50 GMT

thanks!

one last question. Would it be appropriate to pretend I d...

dedo79 — Thu, 06 Jun 2019 16:40:51 GMT

one last question. Would it be appropriate to pretend I did receive a 1099-B and follow the instructions above, i.e.:

Click the Yes box on the screen Did you get a 1099-B or a brokerage statement for these sales?
On the screen, Choose your bank or brokerage, click on the box I'll type it myself.
Enter the name of the bank or brokerage and click Continue.
On the screen, Tell us about your [XX] 1099-B, mark the button I'll enter a summary for each sales category.
Boxes will appear for you to enter the proceeds, basis, and category. After entering your information for this category, click the Done box. [Screenshot #3]

Well, that's contrary to the instructions for filing out...

TomYoung — Thu, 06 Jun 2019 16:40:53 GMT

Well, that's contrary to the instructions for filing out Form 8949 but I generally take the position that as long as you report your taxable income properly that doesn't give the IRS much leverage over you.

Personally I'd go the no "1099-B" route - why possibly confuse things with the IRS, especially if you DO have 1099-B-reported sales - and going that route takes only takes about 37.3 seconds more work.

Two SuperUsers have given good information on cryptocurre...

IreneS — Thu, 06 Jun 2019 16:40:56 GMT

Two SuperUsers have given good information on cryptocurrency trades:

Per SuperUser Tom Young:

You do need to enter each trade. You'll list each trade using the "Stocks, Mutual funds, Bonds, Other" interview and tell TurboTax that no 1099-B was received. As to investment type you can select "Everything else." You'll translate proceeds of each sale into the spot US dollar amount at the time of the sale.

Per SuperUser Opus17:

You have two different income streams to consider.

When you mine the coins, you have income on the day the coin is "created" in your account at that day's exchange value. You can report the income as a hobby or as self-employment. If you report as a hobby, you include the value of the coins as "other income" on line 21 of form 1040. Your ability to deduct any expenses is limited -- expenses are itemized deductions subject to the 2% rule.

If you report as self-employment income (you are doing "work" with the intent of earning a profit) then you report the income on schedule C. You can fully deduct your expenses (if you can prove them) (see later). The net profit is subject to income tax and self-employment tax.

Your second income stream comes when you actually sell the coins to someone else for dollars or other currency. Then you have a capital gain (if they were worth more when you sold them than when you mined them) or you have a capital loss (if they are worth less when you sell them). And the gain or loss will be taxed differently if it is a short term gain (you held it one year or less) or long term (more than one year). You will need to keep track of each coin you create (date, value) and when you sell it (date and value).

And of course, if you immediately sell the coin for cash, then you only have income from the creation, you don't also have a capital gain or loss.

Now, as far as expenses are concerned, if you are doing this as a schedule C business, you can take an expense deduction for computer equipment you buy (as depreciation, subject to all the rules) and your other expenses (mainly electricity, maybe a home office). But you need to be able to prove those expenses, such as with a separate electric meter or at least having your computer equipment plugged into a portable electric meter so you can tell how much of your electric bill was used in your business. Unless your expenses are very high, they won't offset the extra self-employment tax, so you will probably pay less tax if you report the income as hobby income and forget about the expenses. (On the other hand, if you report it as self-employment and pay SE tax, that adds to your credits in the social security system which may allow you to qualify for a higher retirement benefit. Having self-employment income on schedule C also allow you to claim some tax deductions like an IRA that you can't claim if all your income is hobby or "other" income. So there may be benefits to paying SE tax in the long run.)

If you earn more than a couple thousand dollars per year you will need to think about making estimated tax payments as well.

Thanks Irene, but none of those two answers actually answ...

dedo79 — Thu, 06 Jun 2019 16:40:57 GMT

Thanks Irene, but none of those two answers actually answer my question. Could you please advice on the specifics of adding transactions via a separate document? Thanks

I have added a second answer, detailing how to enter just...

IreneS — Thu, 06 Jun 2019 16:40:59 GMT

I have added a second answer, detailing how to enter just summaries and then mail in the statement.

thank you Irene. The instructions you added imply that I...

dedo79 — Thu, 06 Jun 2019 16:41:00 GMT

thank you Irene. The instructions you added imply that I received form 1099-B but I just received a 1099-K. Should I pretend I received a 1099-B and follow those instructions anyway?

yes

IreneS — Thu, 06 Jun 2019 16:41:02 GMT

yes

ok, thanks. Would I enter Coinbase as "brokerage" or shou...

dedo79 — Thu, 06 Jun 2019 16:41:03 GMT

ok, thanks. Would I enter Coinbase as "brokerage" or should I leave the brokerage name blank?

You can report just the summaries of each category (short...

IreneS — Thu, 19 Mar 2020 18:45:37 GMT

You can report just the summaries of each category (short-term, long-term, etc.) and then mail in the statement to the IRS after filing. Please follow these steps:

Click on Federal > Wages & Income.
In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.
If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far. Click on the Add More Sales link.
Click the Yes box on the screen Did you get a 1099-B or a brokerage statement for these sales?
On the screen, Choose your bank or brokerage, click on the box I'll type it myself.
Enter the name of the bank or brokerage and click Continue.
On the screen, Tell us about your [XX] 1099-B, mark the button I'll enter a summary for each sales category.
Boxes will appear for you to enter the proceeds, basis, and category. After entering your information for this category, click the Done box.
On the screen, Do you have another sale to enter from your Big Bucks Brokerage 1099-B? mark the appropriate button.
If you marked Yes, a Sale #2 - Tell us about your [XX] 1099-B screen will appear to enter the information on another category.
Continue entering summaries of the transactions for all the categories. When you are finished, on the screen Do you have another sale... mark the No box and click Continue.
The next screen will be a summary of your entries: Here's all the sales reported by [XX]. You can Edit, Delete, or Add a transaction.
For the instructions to mail in your statements, click on the instructions link underneath the table of transactions.

[Edited | 3/19/2020 | 11:45 am PDT]