Can Bitcoin.tax aggregated reports be manually entered into TurboTax Online? Not individual transactions?

Yes, you can use TurboTax Online for this cryptocurrency required actions.  If you are actually mining crypto then follow the instructions below and TurboTax Online Self-employed or TurboTax CD/Download Home & Business.

 

Reporting for Mining:

• For US tax, mining is an income producing activity and is therefore classified as a business.
• Most home miners will report their activity on a Schedule C. The mined coins will be reported as income and any associated expenses, such as utilities and depreciation of requisite fixed assets will be included.

The definition of mining vs trading are listed below for your convenience.

 

Mining: The way cryptocurrencies are created - How will mining customers report their income and expenses

• Mining is the act of using various types of computer hardware and software to solve an algorithm, also known as crypto mining.
• When a miner successfully solves the algorithm, they can keep the currency mined along with some other incentives.  When solved, the algorithm changes, becomes slightly more difficult and the process repeats.
• Some currencies, a home computer can mine.  For more difficult  currencies such as Bitcoin, computer hardware with a specialized graphical processing unit (GPU) chip or application-specific integrated circuits (ASICs) ae used.

If you decide you are mining follow the steps below to begin reporting:

• In the Search box (upper right) Type schedule c and click the Jump to link in the search results (TurboTax Online or CD/Download)

Trading: The exchange of goods/services for cryptocurrency

• The act of buying and/or selling the digital currency, as well as using it for barter (exchange for goods or services). This must be reported with or without documentation or statements.  The IRS has determined that cryptocurrency is to be treated like property which means it can result in capital gain or loss.

Reporting for trading:  You should aggregate your sales but separated for long term and short term. (Long term is for crypto that has been held longer than one year, i.e., one year plus one day).  You can use two transactions, and you can use 'various' for the date of purchase, then select long or short term for the type of sale/trade.

• In TurboTax Online you will find Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) as a selection under Investment Income
• In TurboTax Desktop you will enter Cryptocurrency as a Stock, Mutual Funds, Bonds, Other, under Investment Income
• OR simply search for Cryptocurrency in the upper right  

Form 8949 will be competed, and this, along with your detail information documents must be mailed within three days after your return has been accepted with Form 8453 as the cover sheet.

 

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).

Thank you for the reply. Unfortunately I am still a bit unclear on specifics, and need some clarification.

 

1. For the Income section, I assume everything will be added under "Other self-employed income, includes 1099-K, cash and checks"? I have to add rewards payments from Coinbase as well. I do not have 1099 reports for any of this, only the information pulled into Bitcoin.tax.

 

2. I am still not clear on what "aggregated values" I would need to enter into TurboTax. Under the "Capital Gains Report", Bitcoin.tax has a table showing Coin, Volume, Proceeds, Cost, Total Gain/Loss. They seem to be the average of all the trades made. Are these the "aggregated values" I will need to add to TurboTax? (All of these are Short-Term, btw).

 

When I explored this section before, all the system allowed me to do was input specific trades - which required a purchase and sale date, and specific cost/sale (not an average). Are "aggregated" numbers entered elsewhere?

 

3. Regarding the 8949 Statement, should amounts remain specific, or rounded off? Single or double sided? (This will contain over 57,000 transactions and is at least 1,000 printed pages. I just want to make sure that I mail IRS the proper info the first time.)

 

Also, will I need to send the "Income Report" and "Closing Report" as well, or just the "Capital Gains Report"? 

I appreciate the help very much, and thank you for your patience! This is all new territory for me.

You pay additional self-employment taxes for income reported in the "Other Self-Employment" section. As far as cryptocurrency goes, this is where you would report the income you made from mining or if you sold a product or service and were paid in cryptocurrency.  

 

The rewards payments from Coinbase for things like "Watch this video to learn about xyz currency and earn $3" would be reported as other income. The Income Report you mentioned from Bitcoin.tax should have all your other income. To enter income here, follow these steps:

1. With your return open, go to Federal > Income & Expenses
2. Open the Less Common Income section and start or revisit the last entry, Miscellaneous Income, 1099-A, 1099-C.
3. On the next screen, start/revisit the very last entry, Other Reportable Income, and answer Yes on the following screen.
4. On the next screen, enter a description (for example, "Coinbase Rewards Payments") and then enter the total USD amount.
5. You may repeat this for every currency for which you received interest or a rewards payment or combine them on a single line.
6. Select Continue when finished.

 

The third section to report cryptocurrency is for the actual gains and losses from trading cryptocurrency. This is your Capital Gains Report. To report these:

1. With your return open, go to Federal > Income & Expenses
2. Open the Investment Income section and start or revisit Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
3. Continue by selecting Yes and then clicking on Cryptocurrency
4. You can try any of the import options, but if you have too many trades, you can select Try Another Way and then Upload it from my computer.
5. Select Bitcoin.tax from the pull-down menu and import their CSV.

The aggregated totals of your trades should carry through and be reflected on your tax return when the CSV imports. The Closing Report is not reported on your taxes. That is for your information and should provide you with information about your current investments, how long you have held them, and how much you bought them for. 

 

 

Thank you @RaifH for the additional help. I think I'm clear up until the Gains/Losses reporting and the aggregated totals. The problem is that the system can only import 2000 trades, and I have well over 57,000 of them (due to bot trading). There is no way to easily import this information into TurboTax, because it is too large...

From @DianeW777 's instructions, the solution seems to be to input the aggregated totals into TurboTax (I am still not clear where), and then mail the full printed 8949 Statement along with a cover sheet.

As I look, the table shown in Bitcoin.tax shows me the aggregated totals I would need to enter, but there seems to be nowhere to do it. This is the dilemma, it seems to only offer an option to add 75 SPECIFIC trades. If I try to enter without a "Date of Purchase" and "Date of Sale", it brings up an error.

I also want to make sure I am generating the 8949 statement correctly. I know that in general the IRS wants you to round numbers, but I am not sure if this applies to the detail report or not...

Thanks again.

How does Bitcoin aggregate the totals? Is everything listed by dates or did they group Long Term and Short Term gain? 

Did they also separate income from Capital Gain? 

@KrisD15 Bitcoin.tax brings up a table with "Coin, Volume, Proceeds, Cost, Short-Term, Long-Term, Total Gain/Loss" in that order. You're able to sort by Short and Long term, but all of mine are Short. It also allows you to round up/down (which I'm not sure is correct).

Where this fails is that TurboTax only seems to allow specific trades with a buy/sell date, or importing by CSV (where TurboTax tries to group them). I have too many transactions to import (I have tried) and it won't let me enter them manually without a specific date.

Is it as simple as using the entire year? Or the last day of the year for both? (The detailed report will contain the exact purchase/sale times).

Since the report is listing the short term capital gains, (separate from the long term capital gains which you don't have) you can enter that under Investments.

The IRS taxes Short Term and Long Term gains differently, so that is what is important to them. 

 

Be sure to enter the mining income as "Self-Employment Income" 

 

For the capital gains, enter them under Investments this way since they have already been tallied and grouped.

 

Select "Stocks, Bonds, Mutual Funds" as the Investment type 

DO NOT SELECT CRYPTOCURRENCY since you will not be uploading the .csv

CONTINUE

CONTINUE

"I'll type it myself"

Enter the Brokerage and account number

CONTINUE

Answer the interview question that you have "Yes (4+)" sales on your 1099-B and "Yes" to "Did you buy the investments"

CONTINUE

Select "Sales section totals" 

Continue

On the next screen you should be able to report the total as "Short Term" and I think covered since I think the basis is being reported to the IRS for these. 

Enter the proceeds and basis

 

That should do it. 

 

The "Mining Income" will be reported as schedule C income. 

 

If you hold a foreign wallet, you MAY need to include Form 8938. 

 

 

 

 

 

@KrisD15 Thanks again for this, I really appreciate it!
I've gone through the steps you posted, and I now have just one entry that looks similar to this:

Brokerage Service	Type	Number of Sales	Proceeds from sales	Cost basis from sales	Total gain or loss
Coinbase Pro	Stocks, bonds, etc	1	$xxx,xxx.xx	$xxx,xxx.xx	-$x,xxx.xx
Totals		1	$xxx,xxx.xx	$xxx,xxx.xx	-$x,xxx.xx

 

This doesn't feel right to me at all. Wouldn't they need at least an average breakdown for each Coin? Or do they only take the total and compare that to the 8949 Statement (which I'll be mailing to them)?

I'm also concerned about it being reported in the wrong section, as Stocks (rather than as Crypto). The last thing I want is to be in trouble for a stupid technicality like that. Coinbase also does not issue 1099-B forms...

Just for fun, I went back to the Crypto section to attempt entering the "aggregated" amounts. Since I posted this question, they just added an option to select "Something other than a date" for purchasing, but NOT for sales... which makes no sense.

They also still say that you can only enter 75 transactions here manually. I have exactly 76 Coins to enter. So I may be stuck with entering them as "stocks" regardless- I just want to make sure it's being done the right way.

Almost there! Thanks again for your patience and help!

Trading Virtual currency (Cryptocurrency) is treated the same by the IRS as trading stock. 

The trade, or sale, will result in a gain or loss. 

 

Capital gain or loss is reported on the Federal 1040 in the same section, whether for stocks, bonds or Cryptocurrency; whatever has been purchased, held for investment, and then sold. There is no section specific to cryptocurrency on a Federal Tax return. 

 

The TurboTax program adds sections to make it easier for the taxpayer to enter their information correctly so it ends up where it should go and calculations can be made within the software. Since you do not need to upload a .csv file, there is no reason you need to go to the section in TurboTax specific for most customers that are trying to enter their cryptocurrency trades without an aggregated statement. 

 

The IRS views Cryptocurrency as property and the trading of Cryptocurrency the same as trading any other asset. 

 

IRS Pub 544

"A sale is a transfer of property for money or a
mortgage, note, or other promise to pay money.
An exchange is a transfer of property for other
property or services."

 

"Investment property
(such as stocks and bonds) is a capital asset,
and a gain or loss from its sale or exchange is a
capital gain or loss."

 

IRS Notice 2014-21

 

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency. "

 

A-7: The character of the gain or loss generally depends on whether the virtual
currency is a capital asset in the hands of the taxpayer. A taxpayer generally realizes
capital gain or loss on the sale or exchange of virtual currency that is a capital asset in
the hands of the taxpayer. For example, stocks, bonds, and other investment property
are generally capital assets. 

 

 

You are taxed on the TOTAL gain, the IRS will NOT look at each individual trade unless you come under audit in which case they will look at the 8949 Statement and whatever is being provided directly from the Brokerage to the IRS. 

 

Numbers are rounded up or down AFTER a total is computed. 

 

The section for entering crypto always had the option of choosing "Various" for the purchase date, but not for selling date. 

This section is so that the TurboTax program can do the math and report the gain/loss as short term/long term but your aggregated statement already does that. 

 

In other words, it doesn't matter if you enter it in the "Crypto Section" or "Stocks, Bonds etc. Section" (etc. includes Virtual Currency) in the TurboTax program, it all goes to the same place on the 1040. 

 

I hope this clears things up. 

 

@homerpez

 

ALTHOUGH I WOULD ASK ABOUT THE VOLUME YOU ARE REPORTING, shouldn't that be more than 1?  If the aggregate reports a number in volume, I would use that for number of sales. 

 

[Edited 02/01/2022 I 2:39 pm PST}