Hi, I have premier desktop and I am adding cryptocurrency(used cointracking turbo tax file) buy and sells manually because when I import it, it shows I have 'gross proceeds' at a ridiculous amount of money when I never had at any time that amount of money. Also when I import it it shows 1099 b when I didn't receive one but when you import there is no way to change that information. I hope I did not waste my money with this software. I am not sure if it is screwed because of it mostly being crypto to crypto trades or not. I need help because I am not used to all of this. Also since I know for a fact I wont have money to pay it. What is my gross proceeds and why is it so high even though I never had that amount of money. is it a calculation of all trades in the year? I have over 2000 trades. Short term gain and usually made within a few days apart from eachother. Please help!
You are on the right track! Using the desktop software is the way to go. Everything you are seeing is more than likely correct. Investment transactions are reported on a 1099-B. Your 1099-B reflects all your sales, aka gross proceeds. Now you need to figure out what you paid for each sale so you are only taxed on your gains instead of your gross proceeds amount.
Basically, when you report investment transactions, you need to report your purchase information (date of purchase and the price you paid) and your sale information (date of sale and the price at sale). You pay tax on any gains. So that's the goal - to figure out your profit! You can report all of your transactions individually or you can report a summary and mail your supporting documentation to the IRS.
When asked for the type of investment you sold, you can select Everything else. If you are entering each transaction, you will enter the date of the sale, the date of purchase, the sale price, and the cost.
If you elect to provide a summary of all your sales, you will need to split them into two categories in TurboTax: Category C, short term not reported, or Category F, long term not reported. You will need to mail your supporting documentation such as spreadsheets or schedules that reflect your purchase and sale information to the IRS. The total price paid and price sold reported on your tax return need to match all of the purchases and sales data on your documentation.
Date of sale
What was sold
Sales price (proceeds)
Cost basis (what you paid)
Date of acquisition (purchase)
You will need to mail your supporting documentation with Form 8453, U.S. Individual Income Tax Transmittal for an IRS e-file Return along with Form 8949, Sales and Other Dispositions of Capital Assets to the IRS. Check the last box on Form 8453. A pdf of Form 8453 is attached below.
Click the TurboTax FAQ link below for steps on reporting a summary of your brokerage transactions.
Gross proceeds cannot be negative, as they are just the sum of all of your fair market values at the time of each sell or trade to another cryptocurrency. You can wind up with a negative gain when the gross cost basis is larger than the gross proceeds. This is quite common.
You can also automatically build out your required cryptocurrency tax reports by using one of TurboTax's cryptocurrency partners. The software will allow you to import all of your trades and will automatically do all of the number crunching for you.