How to report crypto TRANSFER

[riversidekid]

I moved coin from NiceHash to Coinbase.  Many times as I was mining with NiceHash.  I uploaded all transactions from both NiceHash and Coinbase.

Now TurboTax Online lists errors showing a missing transaction type on select transactions from each exchange.  I cannot list these as transfer as the transfer option is not in the drop down.

Logically it looks like one is a WITHDRAWAL and one DEPOSIT, but WITHDRAWAL is also not listed.

The transactions are "+" on each side as the CVS documentation indicated that there could be no negative transactions.  It seems that TurboTax is counting an increase in value in each side of the transaction.  TurboTax indicates that I profited on my investing when I have actually lost about 25% of my total cash investmented.  What have I done wrong?

Types of Transactions

https://ttlc.intuit.com/turbotax-support/en-us/help-article/cryptocurrency/crypto-transac[product ke...

[JohnB5677]

A transfer between platforms is not a taxable event.  There is no transaction type because no transaction occurred.  You can delete every one of those transfers on both sides of the transaction.

Keep records of your crypto transactions.

The IRS is stepping up enforcement of cryptocurrency tax reporting as these virtual currencies grow in popularity. As a result, you need to keep track of your crypto activity and report this information to the IRS on the appropriate crypto tax forms.

Beginning in tax year 2020, the IRS also made a change to Form 1040 and began including the question: "At any time during 2022, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?"  If you check "yes," the IRS will likely expect to see income from cryptocurrency transactions on your tax return.

[riversidekid]

How do I delete the transactions?  TurboTax connected directly to Kraken and Coinbase and pulled transactions.  I manually uploaded entries from NiceHash and could delete the NiceHash transfers from the CSV before upload but I cannot find a way to delete the Kraken and Coinbase entries representing the other side of the same transaction.

I have looked into services that compile tax form information for me, but since NiceHash is rather detailed, I have thousands of transactions and the compiled forms would cost hundreds to show that I lost a few dollars.  Is there a way to say "just be reasonable, and list the total loss rather than every line?"

[JohnB5677]

Possibly, if the summary of all three platforms is correct you can post the summary and attach the detail in TurboTax to send to the IRS.

1. You can mail it, or
2. You can attach them electronically.

If you choose the mail option.  Enter a summary instead of entering each sale, then you have to mail a copy of the brokerage statement listing the individual sales.  This is an IRS requirement. 

• If you e-file, TurboTax will produce a Form 8453. You print the Form 8453 and attach the brokerage statement(s) to it. 
• If you file by mail, attach the statement(s) at the back of your tax return, after all the forms and schedules. 
• In either case, click the "mailing instructions" link in the message at the bottom of the TurboTax page and follow the instructions that it displays.

To attach PDF of 1099-B

The process can be involved, and certain screens may not be in the same order as I've listed, but it does work.

1. Wages and Income
2. Scroll to Investments & Savings
3. Select Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B) [Start or Revisit]
4. If you already have an entry, select Add an Investment.
5. Get ready to be impressed - Continue.
6. Click Enter a different way.
7. Stocks, Bonds, Mutual Funds - Continue
8. Enter Broker - Continue
9. Tell us about the sales on your FSC eQuipt 1099‑B.
   1. Do these sales include any employee stock? - No
   2. Do you have more than three sales on your 1099‑B? - Yes (4+)
   3. Do these sales include any other types of investments? - No
   4. Did you buy every investment listed on your 1099‑B? - Yes
   5. Continue
10. Choose Sales Section tools - Continue.
11. Look for your sales on your 1099‑B - Continue
12. Post your sales.
13. This will close the record.
14. Continue to screen Now we'll help you upload your 1099-B since the IRS requires a copy.
15. Browse and select your document.
16. Document will show in TurboTax - Continue
17. This completes the process.
18. When you upload your document, your filing instructions will not show that anything needs to be mailed in, and no Form 8453 will be generated.

[riversidekid]

Thank you, but I did not receive a 1099 from these crypto companies, much less a FSC eQuipt 1099‑B.

With no 1099, does that mean I do not need to report my cryptocurrencies?  (Keep in mind that I am mostly mining, with one gaming video card and invested very little actual cash and lost the cash in the end.)

I do not see a way to follow your instructions without a 1099 from the crypto companies.

[CarissaM]

It would be best to click here and give us a call, so we can better assist you. @riversidekid 

[riversidekid]

Thank you CarissaM, but the support group tells me that my question (how to delete the transfers) is not a product question, but a tax advise question so I would need to upgrade my TurboTax Online Premiere to TurboTax Live Advice for an additional $209.00.

Where I disagree and am tempted to take my business down the street to another tax advisor I think the cryptocurrency issues are new and I am willing to wait until there is another solution via the TurboTax message board.

There must be another way to edit the transactions that TurboTax imported from the various crypto companies.

[JamesG1]

You stated:  "TurboTax connected directly to Kraken and Coinbase and pulled transactions".

Are you able to download a .csv file from Kraken and Coinbase and review the listed transactions like you did with NiceHash?

After review, you are able to upload the .csv files like you did with NiceHash.

@riversidekid 

[riversidekid]

If TurboTax cannot recognize a transfer of funds from one institution to another then TurboTax is just not ready for prime time.  A transfer is a fairly simple transaction.

That said, yes, a CSV import is likely what I'll need to do but it took me a week to get the NiceHash data into the TurboTax format and the exports from other crypto companies are not as straight forward.  The time involved is outrageous compared to the money I am already paying for TurboTax online to handle this for me.

Keep in mind, where I am attempting to keep my question here simple, I have transacted cryptocurrency in SIX different crypto companies, each with their own formatting.  After this horrible experience with TurboTax I will simplify, but this is just an example that the software is not ready to handle simple transactions.

I still await a user friendly answer from the software vendor as the software is continually updated.