which tax consultant should i hire to report crypto gains
all I have is some excel sheets provided by gemini and coinbase. I am ignoring reports from bittrex and binance as they do not deal with USD
I met with my normal accountant and he was already very informed. I used Cointracker and Bitcoin.tax to compute a transaction history and asset statement (forget the form but you pay extra for it). Then I signed some papers saying I agreed to disclose transactions with the IRS (my accountant provided those). IRS no longer has a 25k threshold. It’s important to realize that anytime you convert one currency to the next, you are realizing a gain(if there were any). So if you sold Bitcoin at 10k and bought an altcoin, and you had a gain on that Bitcoin, even if you did not pull out the money in USD, you are liable for capital gains.
Adding to the above: Keep in mind that crypto you hold more than one year before selling is treated as capital gains, and crypto you hold less than one year before selling is treated as regular income. The system you use to determine this can be FIFO or LIFO as long as it’s consistent (google those if you don’t know what they mean). Most any accountant, if you give them a spreadsheet of buys / sells and a total profit, and tell them the rule above, will be more than capable of handling it. Accounting for crypto is actually quite simple, it’s just that crypto is new.
who is your consultant. how can I contact him?
One more comment regarding bittrex and binance: it’s always taxed when you convert into a fiat currency, even if that currency is not USD, even if you immediately buy more crypto with the money. E.g. Buy 1 bitcoin at 500 -> sell for 600 -> immediately buy 1 bitcoin at 600 -> you owe taxes on 100 of income (cap gains if you held the coin for at least one year).
That doesn't seem specific to bittrex and binance, it's true of any crypto sale on any exchange (or even an in-person sale)
Yes actually technically true of many sales. I bought collectible items and track their cost basis in quicken. When you fill out your taxes in something like TurboTax you can fill out a substitute 1099 form or something like that.
Use bitcoin.tax to generate form 8949. Use TurboTax to report short/long gains in a summarized format. Then mail in form 8949 and e-file the rest with TurboTax. Make sure you report stuff like the bitcoin cash fork as income.
You have to report on exchanges on bittrex and binance as well. For binance you also have to fill in a FinCen form 114 if you have more than 10k in it
You mean fbar?
Use bear.tax to easily import transactions from coinbase Gemini and calculate gain loss... View and pay only when you need the tax document
U can do it urself by just adding them as capital gains
This isn’t always true. Check my comment below. Note that if you hold for less than one year before selling, it CAN’T be cap gains, it HAS to be treated as regular income, regardless of whether your marginal tax rate is higher or lower than cap gains tax rate
^^ incorrect. They are still cap gains, just short term cap gains, taxed at a diff rate than long term.