topic How do you file taxes with bitcoin? Do I have to? I just started January 2018. in Business & farm

How do you file taxes with bitcoin? Do I have to? I just started January 2018.

erben5525 — Thu, 06 Jun 2019 13:55:05 GMT

New guidance will probably come out in 2018 but for now:...

maglib — Thu, 06 Jun 2019 13:55:07 GMT

New guidance will probably come out in 2018 but for now:

Cryptocurrency, bitcoin, ethereum, etc is considered property by the IRS and every move (spending, exchanging, selling, income if paid to you for services, etc), within the tax year is a recordable transaction. Cryptocurrency held for investment has a gain/loss. Cryptocurrency for personal property is only gains, no losses (so for purchases of goods and services, there is only gains, no losses as they are personal). If paid to you for personal services, it is considered reportable income at the spot rate on date of receipt. It can be considered business, hobby, investment, or personal income property depending on your intent to make a profit to consider it a business.

To reports gains/losses allowed (NOT FOR MINERS, miners report as self-employed on schedule C using Turbotax Self Employed https://ttlc.intuit.com/replies/4944762 or as hobby income https://ttlc.intuit.com/replies/5675605 and the cryptoccy for them is as if they produced and sold inventory, they have expenses of producing for schedule C or as itemized deductions, then they have income for the receipt of the cryptoccy at spot rate on production, then they sell that inventory unless they held for investment purposes LT,decision for hobby vs. self employed https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses) . Non-miners to reports gains/losses to the extent allowed go to type "Investment Income" without the quotes in the search box, select "Investment Income, gains & Losses" and choose to JUMP TO, It will ask if you sold any invesments, say yes, select NO to the 1099-B question, Choose "Personal Items" for crypto used for personal purposes, or Everything Else for crypto held for investment purposes. Record each transaction with the date you moved the coins, for how much, when you acquired them, and for what. You can't take a loss on personal items (if you used cryptoccy to purchase goods and services) which you report those under personal items. Cryptocurrency for investment purposes is recorded as Everything Else. Make sure only personal use cryptocurrency is recorded in the personal Items section.

You can report transactions in summary for the year as investments LT vs ST and Personal LT vs. ST for 4 categories of reporting. You can use various for the date of purchase and 12/31/17 as date of sale.

https://www.irs.gov/pub/irs-pdf/p544.pdf and https://www.irs.gov/pub/irs-pdf/i8949.pdf are the IRS rules for property and reporting. Personal property net losses are not deductible but investment property is.... follow the IRS guidelines for property.

IRS guidance on cryptocurrency as property:

https://www.irs.gov/newsroom/irs-virtual-currency-guidance

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

If you have a large number of transactions, there are a few tax reporting softwares to help you out to get proper bottom line such as bitcoin.tax and TT does not support any of their accuracy. Do note that I understand that these softwares are treating it all as investment grade so they may not be completely accurate as personal use does not allow losses.

I hope this was helpful?

https://www.cnbc.com/2018/01/30/cryptocurrency-and-taxes-what-you-need-to-know.html

Yes, you will want to report all income on your tax retur...

AmyW — Thu, 06 Jun 2019 13:55:10 GMT

Yes, you will want to report all income on your tax return including cybercurrency. However, if you started trading bitcoin in 2018, then you will report it on your 2018 tax return.

Which option do I press to report crypto?

erben5525 — Thu, 06 Jun 2019 13:55:11 GMT

Which option do I press to report crypto?

If you purchased it this year in 2018, it will be reporte...

AmyW — Thu, 06 Jun 2019 13:55:13 GMT

If you purchased it this year in 2018, it will be reported on your return next year. If you want to have a form to import to TurboTax, you will want to use the TurboTax downloaded software. Do note, that the import is limited to the first 500 lines
Follow the steps below to import your cryptocurrency transactions:
* Click on the Personal Income Tab
* Scroll down to the Investment Income and choose Start next to Stocks, Mutual Funds. Bonds, Other
* Click Yes when asked “Did you sell Any Investments in 2017?”
* You will then have the option to Import from a TXF file.
If you would prefer to use TurboTax online, then you will want to enter the summary information from the form and mail in the statement manually. TurboTax walk you through the process to mail the correct forms.

Re: Which option do I press to report crypto?

CryptoTraderTax — Mon, 17 Jun 2019 22:05:51 GMT

TurboTax also partnered with a number of different cryptocurrency tax reporting platforms this year to make it easier for users to report.

If you want to automate the process for reporting your cryptocurrency transactions you can use one of these partners.

You can also learn how cryptocurrency taxes work by reading this guide: How cryptocurrency taxes work.