I think it will be a while before we can pay to have our taxes done and not fear being jailed for mistakes, Not many people understand cryto outside those who use it.
This is an interesting comment. How much time do you think the American taxpayers have? Does the size of their holdings or transactions have any impact on the timeframe?
Taxes are a m*therf*cker, yeah? Proceed carefully.
This guy has the right idea, maybe you should hire him to help you get your affairs in order before you file with the authorities.
In a nutshell: You need to export your trading histories from all exchanges, then calculate the basis and adjusted basis of your investments. When you use USD to buy BTC, that forms the basis of your BTC investment. Let's say you bought at $1000 -- that's your basis.
Now let's say you used that BTC to buy an altcoin. The altcoin price was 0.002 BTC and the BTC price at the time was $1500. That means that your adjusted basis on your original BTC buy is $1500. So, you had a taxable gain of $500/BTC. In this example, your new altcoin investment has a basis of $3/coin. And so on.....
If you just mix all your coins together and don't keep separate, identifiable lots, then you need to calculate using FIFO or LIFO. More on that here. Good luck!
Now let's say you used that BTC to buy an altcoin. The altcoin price was 0.002 BTC and the BTC price at the time was $1500. That means that your adjusted basis on your original BTC buy is $1500. So, you had a taxable gain of $500/BTC. In this example, your new altcoin investment has a basis of $3/coin. And so on.....
If you just mix all your coins together and don't keep separate, identifiable lots, then you need to calculate using FIFO or LIFO. More on that here. Good luck!
The LIFO/FIFO thing isn't as daunting as it sounds, it actually gives you more control over how you report your gains or losses.
