Can I calculate my cryptocurrency gains/losses myself, or should I let TurboTax do it? How does it get reported in either case if there are hundreds of transactions?

[denis9]

1) if I have already calculated gain/loss for every transaction, how is this reported? E.g. do I type the final net values in TurboTax, then send details to the IRS similar to a 1099-B from my Broker?
2) If it is the latter, then what exactly do I send to the IRS? E.g. if there are hundreds of transactions, do I print out an Excel spreadsheet?
3) Should transactions  for a gain/loss of less than $1 still be reported?

[npierson7]

Yes, you can calculate your crypto gains and losses yourself. 

You'll need to complete IRS Form 8949 and include your totals from 8949 on Form Schedule D and  also include this income on Schedule 1 (or Schedule C if you are engaging in crypto taxes as self-employed). Send Form 8949 and Schedule D to the IRS. You don't need to include the Excel files. 

As for the transactions for less that a $1, if you had lot's of them, their combined amount could change your calculation, so it is better to report them as well. 

[denis9]

If I have hundreds or even thousands of transactions, how I complete form 8949?  With my broker, I put a single summary line on 8949 (via TurboTax) then I mail in the 1099-B. Is it similar with cryptocurrency?  Is it:

A) I print out an Excel spreadsheet with the columns matching what you see in the 8949/1099B, OR

B) I need to somehow generate many pages of 8949 listing all the transactions. If it's this one, then I imagine there must be a way to get TurboTax to do it.

>>>As for the transactions for less that a $1, if you had lot's of them, their combined amount could change your calculation, so it is better to report them as well. <<<

That is a good point. But what about transactions that net to exactly 0? Could those be omitted or better to include?

[KathrynG3]

Yes, you can use an excel spreadsheet. It is best to include all the transactions that occurred in 2020, even if they resulted in 0 tax effect.

Alternatively, you may consider getting a service to aggregate the transactions.

For more details, see: How do I report earnings or losses from Bitcoin and other cryptocurrency?

How is cryptocurrency like Bitcoin taxed?

[denis9]

That is good to know regarding 0 transactions.

What I still don't understand is the exact specifications for reporting the transactions (e.g. printout an Excel spreadsheet? What columns?). I know you can use "Form 8949" and itemize them all, but that is impractical if you had thousands of transactions. With stocks, the Form 8949 actually says that you can summarize a 1099-B and separately mail that in, but doesn't specifically mention other types of property.

I was looking at the "Form 8949 Instructions" and saw "Exceptions to reporting each transaction on a separate row".  "Exception 2" may apply here. It says you can "report them on an attached statement containing all the same information as Parts I and II and  n a similar format (that is, description of property, dates of acquisition and disposition, proceeds, basis, adjustment and code(s), and gain or (loss)). Use as many attached statements as you need."

QUESTION 1

Are there examples of what these "attached statements" might look like when done in Excel?   It's easy to duplicate the 8 columns from Form 8949, but is there a per-page header that needs to be visible, for example?

QUESTION 2

Is TurboTax capable of generating these "attached statements" if I upload the gains/loss information?  

Does TurboTax allow me to upload transactions formatted in the Form 8949 manner (where basis + sale are on the same line) or does TurboTax only work with original transactions (one line per buy or sell)?

[DianeW777 · Accepted solution]

Question 1 (Recommended): You should separate transactions by holding period -long term from short term. Then you can enter them yourself as two summarized sales.

• Long term is a holding period of more than one year and receives capital gain tax treatment (0%, 10%, 15%, 20% depending on your regular rate of tax)
• Short term is a holding period of one year or less and receives ordinary gain tax treatment (your regular rate)

Columns should be similar to Form 8949 (grouped together by holding period): 

• Description
• Date Acquired
• Date Sold
• Proceeds
• Cost
• Gain/Loss

These worksheet can be filed after your tax return is accepted.  

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

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).

2. My suggestion is to use the method suggested in number 1.  If you have excel type sheets you can reorganize and auto calculate for your totals. This is perfectly acceptable to the IRS and it may make the tax return easier to complete.

[denis9]

This information is very useful - thank you.  When printing out the spreadsheet, do I need to ensure there is a header (either on the first page, or on each page), or is it acceptable to simply have those 6 columns?

[JohnB5677]

A header would be a good way to identify yourself and where the information came from.  The six columns you referred to are all that you're going to need.

@DianeW777 gave you excellent guidance on how to present the spreadsheet.  Be sure to separate any short or long term trades.