Selling Bitcoin question

[wagner4599]

I have a number of CRV forms from Crypto.tax.trader from the past when I bought- and I used a number of exchanges to purchase the bitcoin- some large purchases and some dollar cost average. Does the bitcoin sold have a ledger that follows it when it's sold? Or would I track down the previous purchases. I purchased and my husband purchased on separate exchanges and combined our bitcoin. We do our taxes combined. This is the first time we have sold bitcoin. How does IRS keep track of it?

[MelanieC1]

Hi @wagner4599 ,

Thank you for joining us today!  It sounds like you were actively buying crypto in previous years using different wallets and now you have started to sell.  Bitcoin itself does not track the gains and losses.  

Crypto.tax.trader is CoinLedger .  You should be able to enter your credentials for each wallet and CoinLedger can help determine your capital gains or losses on the Bitcoin sales and generate the proper tax forms.  You can then use this information to complete your 2023 tax return or import directly into TurboTax.

Depending on how much was sold, some exchanges do send a Form 1099 B to the investor and to the IRS.  Most of these forms only list the sales proceeds not the actual adjusted basis.  You will need the adjusted cost basis to determine your net gain or loss.  You can refer back to your records but a platform like CoinLedger can help consolidate your transactions and prepare the tax information you need.

Thank you!

MelanieCPA

[MelanieC1]

Hi @wagner4599 .

TurboTax’s recently launched Investor Center .  You are able to monitor all of your digital wallets and exchanges in one place. 

Here are some of the highlights:

• Tax Outcome Tracker - You’ll see daily estimates on your realized gain/losses as well as after-tax proceeds estimates;
• Portfolio Monitoring -a simple solution to view all your crypto holdings (from multiple sources) in one place;
• Intelligent Tax Optimization - helps to identify and calculate missing cost basis. 
• Integrations  - Currently there are over 15 digital asset wallets, exchanges and blockchain integrations…with more on the way! 

The TurboTax Investor Center is your all-in crypto tax solution. As a matter of fact, you can get started right now to see how it all works. 

MelanieCPA