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Virtual Currency Taxation

Taxation of crypto currency

There has historically been quite a bit of confusion on how virtual currencies would be taxed. Some believe that they qualify for like-kind treatment, some believe that all must be reported as capital gains, and some are just confused as to what to do with their 1099-K form from coinbase.

We can first say that much of the information you will find on forums, non-CPA blog posts, and twitter is either slightly incorrect or completely incorrect. This has lead many to mis-report their cryptocurrency transactions.

Some important points are:

  • You may possibly qualify for the qualified trader election
  • You may be able to net gains/losses from your crypto toward other items on your return, such as ordinary income, other equity transactions, etc.
  • Income from mining, employment, etc. that is paid in crypto is reported differently than income from trading
  • If you exchange one coin for another, yes, that is a reportable transaction. However, do not be overwhelmed with the thought of reconciling records of many trades across many exchanges – we have a simple process to aggregate this information.

Contact us below to either complete or amend your crypto returns.

Need some help? Please fill out the form below and one of our specialists will get back to you immediately.

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