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2017 was the first year where we had a lot of crypto questions! Then valuations came down & we did not hear about coins much until 2020 when they exploded again. Since we have hundreds of clients with crypto, many of them asking some of the same questions, I will go through some common ones below:
The IRS is cracking down on people that have not reported crypto – this is not professional advice until you contact us, however, you must amend your returns to include this right away.
Yes, you must report that as a transaction on form 8949
There are countless platforms that will generate this for you by linking to your exchanges. Examples are cointracker.io and cointracking.info, however, there are dozens that function similarly
You are entirely allowed to use estimates – if you are not sure how the rules around estimates work, please book a consultation with us & we will guide you.
Yes, each activity may have its own reporting requirements, so reach out to us and we will parse through your activity to determine which forms & schedules you are required to file
Yes, financial fraud is still deductible. We can help you with this deduction
Great question – there are quite a few strategies to be implemented here depending on your individual circumstances – happy to go through those with you.
Contract us & we will show you exactly how to handle this [very common] situation
The IRS requires that you report this activity, even if only $100 worth of transactions. This is because although there is a threshold for Coinbase (for example) to generate a 1099, you are still required to report it.
The great news is that wash sales rules don’t apply to crypto. If you sell crypto for a loss, you can use the loss to offset the capital gains.
This depends on the underlying activity, however, generally speaking, this is interest income
Yes, there are several ways to do this, each with their own audit risk, pros & cons, etc. Contact us to discuss as this is a complex decision
This depends on if you are creating the NFT & then selling it – if that is the case, then this is ordinary income [business income] then if it is sold for crypto, trading the crypto back to fiat would require an 8949 filing. If you are confused about this, reach out to us below. If you are trading NFTs, then this is also reported on IRS form 8949.
This is not normal – you are likely victim of crypto fraud. Reach out to us if you need details on what others have done in this case as we receive emails about this literally daily.
The major crypto exchanges such as FTX, Blockfi, Voyager Ditigal, Three Arrows Capital (3AC), and Celsius Network have gone bankgrupt in 2022. If you hold any virtual currencies in any of these exchanges, you may get a tax break.
Every crypto tax situation is unique. If you have questions or need assistance with any of the services mentioned above, please don’t hesitate to reach out. Our team is ready to provide personalized, expert guidance tailored to your specific needs.
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Call us today at (866) 681-2140, email us at info@dimovtax.com, or fill out the form and we’ll get in touch immediately.
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