I have some losses through investing into crypto-currency lately, how do I report that into my tax return filing?

[maglib · Accepted solution]

First you said recently.  If it was 2018, you can't take any losses till next year when you file a 2018 return.  Currently, we are processing returns for activity in 2017.

Cryptocurrency is considered property by the IRS and every move within the tax year is a recordable transaction.  Cryptocurrency held for investment has a gain/loss. Cryptocurrency for personal property is only gains, no losses (so for purchases of goods and services, there is only gains, no losses as they are personal).

To reports gains/losses allowed (NOT FOR MINERS, miners  report as self employed on schedule C and the cryptoccy for them is as if they produced and sold inventory, they have expenses of producing, then they have income for the receipt of the cryptoccy at spot rate on production, then they sell that inventory unless they held for investment purposes LT) . Non-miners  go to "Personal", "Investment Income",  "Stocks, Mutual Funds, Bonds, Other", and record each transaction with the date you sold the coins, for how much, when you acquired them, and for what.  Choose Other as the category.  You can't take a loss on personal items (if you used cryptoccy to purchase goods and services) which you report those under Other/personal items/other. Cryptocurrency for investment purposes is recorded as Everything Else. Make sure only personal use cryptocurrency is recorded in the personal Items section.

You can report transactions in summary for the year as investments LT vs ST and Personal LT vs. ST for 4 categories of reporting.     

https://www.irs.gov/pub/irs-pdf/p544.pdf and  https://www.irs.gov/pub/irs-pdf/i8949.pdf  are the IRS rules for property and reporting.  Personal property net losses are not deductible but investment property is....  follow the IRS guidelines for property.

IRS guidance on cryptocurrency as property:

https://www.irs.gov/newsroom/irs-virtual-currency-guidance 

https://www.irs.gov/pub/irs-drop/n-14-21.pdf 

I hope this was helpful

[LarryLajitas]

So the 2018 returns that we just completed in April of 2019 are for 2017 activity? If I recorded a loss of crypto activity in 2018 then it didn’t have to be reported in the April 2019 submission?

[mesquitebean]

@LarryLajitas  

WHOA!!   This is a year old thread.   You are posting in an old thread from last year that transferred into this new forum when the transition occurred 3 weeks ago.   So any mention of dates here in this thread are a year old at this point.   Disregard any dates here in this old thread.  You are being confused by year-old information.   Unfortunately all the old threads that came from the old forum do not have the original date of the thread.  We have complained about the original thread dates not transferring to this new forum and how it could lead to confusion (as it did here), but have been told there is nothing that can be done.

2018 returns that were due in April 2019 are for 2018 income/loss.

If you need additional help with your situation, then you need to start a new timely thread.  To ask any current question, you can start "your" thread by going to the link below and click the blue "Ask a question" button.

https://ttlc.intuit.com/community/taxes/discussion/02/202