WITHDRAWAL FROM CRYPTO ACCOUNT

[soulwinner10]

Hi,

I purchased, sold, and withdrew all my crypto from a platform I use. The proceeds went to my personal checking. I also had a gain. I reported all transactions on 8949 form, which indicate the gain, proceeds, cost basis etc.

Do I also report the withdraw amount as other income? I invested more than I gained, so how is this reported correctly?

Thank You.

[ReneV4 · Accepted solution]

No. You do not report the withdrawn amount as income.

Reporting only what you withdrew as income may cause you to pay more taxes than you owe.

You will need to gather the information on all of the crypto you purchased, including the date, amount you paid (cost) and the date and amount you sold it for (proceeds) and compare that information to what you have already inputted in Form 8949. 

If you invested more than you gained, it could mean you have a loss, not a gain. It is important to know the total value of your portfolio and your cost basis because you should pay tax only on the gain.

The totals from your Form 8949 should carry over to Schedule D, wherein you will see the total gain/loss of your crypto transactions.

The total from you Schedule D is then transferred to your Form 1040 automatically.