Hello Bitcoin Forum! I have millions in bitcoin gambling winnings going back many years in cold storage and want to come out of the cold. I have reported as a professional gambler for many years and will either 1) go back and amend my previous tax years to reflect my winnings or 2) just declare going forward as winnings. There is constant rollover so the old winnings have been paid out as losses and the winnings are all relatively new. So I'm wondering about just moving forward and the potential pros/cons. Look forward to any assistance!
Hello,
It sounds like you're considering a significant financial decision. Here are some pros and cons:
Option 1: Amending Previous Tax Years
Pros:
Accuracy: Reflects your earnings accurately for each tax year.
Potential Benefits: You may benefit from any lower tax rates or deductions available in past years.
Cons:
Complexity: Amending multiple tax years can be administratively burdensome.
Interest and Penalties: Late payments could result in interest or penalties.
Option 2: Declaring Going Forward
Pros:
Simpler: Moving forward can simplify your tax filings.
Immediate Clarity: You'll avoid the complexities of amending past returns.
Cons:
Audit Risk: Not reporting past winnings accurately might raise flags during an audit.
Missed Deductions: Potential deductions or benefits from past winnings might be lost.
Ultimately, consulting a tax professional is recommended to ensure you navigate this correctly and make the best decisions based on your unique circumstances.
Best Regards,
Joan Martin
I am an attorney and CPA and every year I help hundreds of clients who have not previously reported (or reported in full) their crypto transactions.