Topic: How to prepare cryptocurrency taxes in 4 simple steps (Read 70 times)
For those who did not take record of the trade of cryptocurrency in the last 1 year, especially for the new traders, How will they get to know how much they are owing? How also will those that are victim of market crash endeavor to pay their taxes? USA exchange gives notice of transaction to the government, what happens to trading on Non USA platform with VPN?
Let’s go through the process of preparing and reporting your cryptocurrency taxes step by step.
First, you calculate your capital gains and losses. Make sure you choose a specific cost basis and use the following equation to get these values:
Sales Price - Cost Basis = Crypto Gains/Losses
The second step is to familiarize yourself with the IRS’s Form 8949. Form 8949 will have two series of rows and columns (Parts I and II) where you will input your data. Cost basis, sales price, and gains/losses will be some of the data you’ll have to input.
The third step is actually filling in the 8949 and its accompanying Schedule D form. Group your short-term and long-term gains and losses together. Then, confirm on Parts I and II of the 8949 which types of short-term and long-term gains and losses you are submitting on the form. Select only one option out of A, B, or C from Part I and only one option out of D, E, or F from Part II. Once these have been selected, fill in the rows and columns on Form 8949 and Schedule D.
The last step is to include other forms of crypto income to your tax report, such as forking rewards and mining income. There is quite a variety of these other forms, but you don’t have to worry about these as much with Cointelli. Cointelli is designed from the ground up by seasoned CPAs and engineers to make it as simple as possible for you to accurately and swiftly produce a unified crypto tax form. Check us out at cointelli.com to learn more.
First, you calculate your capital gains and losses. Make sure you choose a specific cost basis and use the following equation to get these values:
Sales Price - Cost Basis = Crypto Gains/Losses
The second step is to familiarize yourself with the IRS’s Form 8949. Form 8949 will have two series of rows and columns (Parts I and II) where you will input your data. Cost basis, sales price, and gains/losses will be some of the data you’ll have to input.
The third step is actually filling in the 8949 and its accompanying Schedule D form. Group your short-term and long-term gains and losses together. Then, confirm on Parts I and II of the 8949 which types of short-term and long-term gains and losses you are submitting on the form. Select only one option out of A, B, or C from Part I and only one option out of D, E, or F from Part II. Once these have been selected, fill in the rows and columns on Form 8949 and Schedule D.
The last step is to include other forms of crypto income to your tax report, such as forking rewards and mining income. There is quite a variety of these other forms, but you don’t have to worry about these as much with Cointelli. Cointelli is designed from the ground up by seasoned CPAs and engineers to make it as simple as possible for you to accurately and swiftly produce a unified crypto tax form. Check us out at cointelli.com to learn more.
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