topic Re: Crypto Currency in Get your taxes done using TurboTax

Crypto Currency

fasteddie577 — Fri, 07 Jan 2022 15:50:50 GMT

Can you write off losses in crypto currency? If so, on what tax form are the losses or gains reported? Thank you.

Re: Crypto Currency

rjs — Fri, 07 Jan 2022 16:00:06 GMT

You report sales of cryptocurrency the same as if it were stocks. If you have a net loss you will be able to claim it just like a loss on stocks.

Re: Crypto Currency

TomK100 — Fri, 07 Jan 2022 18:07:30 GMT

According to IRS Notice 2014-21, the IRS considers cryptocurrency to be property, and capital gains and losses need to be reported on Schedule D and Form 8949 if necessary.

Entering Cryptocurrency transactions into TurboTax:

Open your return.
Search for cryptocurrency in the search box (upper-right corner).
Click on Jump to cryptocurrency.
Enter your transactions..

Entering Cryptocurrency transactions into TurboTax:

Open your return.
Click on Federal tab.
Click on Income & Expenses.
Under Your income and expenses¸ Scroll down to Cryptocurrency, and Click on the Start/Edit/Add.

[Edited 1/07/2022 | 9:58am PST}

@fasteddie577

Re: Crypto Currency

TiredOfCRAP — Mon, 17 Jan 2022 16:54:06 GMT

Tom....elaborate please as I can NOT find anything in regards to cryptocurrency entry in my copy of TurboTax 2021 living on my windows PC as of today, jan 17 2022. Is there not supposed to be a question directly on the front area of the 1040 to indicate if crypto was traded? I can't find it...I'm old tho.

Re: Crypto Currency

TiredOfCRAP — Mon, 17 Jan 2022 17:49:01 GMT

Called TurboTax Support , have case #, support indicates that basically, they don't know why the desktop version does not have any mention whatsoever of cryptocurrency. Even in help there is no mention of crypto. We did screen share and he was quite thorough in looking for anything to do with cryptocurrency. His answer to my issue was to send me this link:
https://ttlc.intuit.com/community/cryptocurrency/help/how-do-i-import-my-cryptocurrency-transactions-into-turbotax/00/2401540

Perhaps an update is forthcoming to cover crypto. I do have Premier for Windows and using Windows 10, all up to date.

Re: Crypto Currency

JohnB5677 — Mon, 17 Jan 2022 18:55:41 GMT

Yes, you can deduct losses in cryptocurrency. First, be sure you have good records.

Cryptocurrency is typically taxed similar to a stock

You will post it to:

Income
Scroll down to Investment Income (1099-B)
Select Stocks, Mutual Funds, Bonds, Other
Although not listed, Cryptocurrency is considered Personal Property and is subject to Capital Gains Taxation.
You may not have gotten a 1099-B for these transactions. You can still post them manually

A taxable transaction will occur when you sell, trade, or otherwise exchange a cryptocurrency.

You are required to provide a summary of each transaction. This will include:

Description
Date of acquisition
Cost or value at acquisition (maybe zero)
Date of sale or exchange
Value or proceeds upon exchange
All associated costs

You may wish to use crypto trading/tracking software to maintain the details for tax reporting.

Posting crypto to TurboTax

Tax on Cryptocurrency

IRS Capital Gains and Losses

Re: Crypto Currency

rjs — Mon, 17 Jan 2022 19:51:41 GMT

@TiredOfCRAP

The desktop TurboTax software already handles cryptocurrency transactions. You don't need a separate section for it. It's treated exactly the same as stock. See the replies by TomK100 and JohnB5677.

The question is not why desktop doesn't have a special section for cryptocurrency. The question is why TurboTax Online does have a special section for it, since it's totally unnecessary. My guess is that it's there because Online users tend to have less knowledge of tax rules, so they may not realize that cryptocurrency should just be treated as stock.

On Form 1040 the question about whether you received, sold, exchanged, or otherwise disposed of any virtual currency is directly below your address at the top of the form. In TurboTax the question is at the end of the Income section, after you click "Done with Income."

Re: Crypto Currency

TiredOfCRAP — Mon, 17 Jan 2022 20:09:37 GMT

OK. Makes sense. I was just HOPING that Intuit did something "special" to make the crypto reporting easier as I do not use Cointracker (long story).

And thanks for telling me where the question: "At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency." is located. I have not clicked "Done" with Income since I I don't do the step by step thing. I 'spose at some point I'll find it.

Re: Crypto Currency

rjs — Mon, 17 Jan 2022 20:09:07 GMT

@TiredOfCRAP If you miss the virtual currency question while preparing your tax return, TurboTax will bring it up as an error when you run Smart Check at the end, before you file.

Re: Crypto Currency

TiredOfCRAP — Mon, 17 Jan 2022 20:10:55 GMT

Good! It'll find me then! LOL.