Accounting Service For Cryptocurrency Trading – One Hour
If you invested in cryptocurrencies (coins) and sold or spent some in 2017, it likely triggered a capital gain, loss, or other income, which you should report on your tax return. You won't receive a 1099-B and the accounting can be challenging.
Update April 4, 2018: It's too close to April 17, 2018, to schedule new trade accounting engagements. We suggest using estimates for preparing and filing tax extensions. You are welcome to purchase trade accounting services but please don't expect us to commence work until after April 17. (See Tax Extensions: 12 Tips To Save You Money.)
If you invested in cryptocurrencies (coins) and sold or spent some in 2017, it likely triggered a capital gain, loss, or other income, which you should report on your tax return. There is taxable income or loss on all coin transactions, including coin-to-currency trades, coin-to-coin trades, receipt of coin in a hard fork or split transaction, purchases of goods or services using a coin, and mining income. There are various types of fees related to coin transactions, and the tax treatment varies.
Cryptocurrency (coin) tax reporting is complicated and voluminous. We use a coin accounting solution to download coin transactions from your coin exchanges. You need to review the download file to be sure all your transactions were imported correctly. It’s normal to have some transactions entered manually.
We use the FIFO (first-in-first-out) accounting method for cost-basis on coin capital gain and loss transactions. The IRS has not yet stated if they will permit other accounting methods for coin, like the specific identification allowed for securities. Even if the IRS approved the specific identification method, it doesn’t seem possible to comply with the requirement for contemporaneously written instructions to the coin exchange. I doubt a coin exchange would confirm a specific identification.
A coin is intangible property and therefore likely not subject to Section 1091 wash sale loss rules for securities. A Section 475 election cannot apply to coin since it’s not a security or commodity (Section 1256 contract). (See our coin tax and accounting content.)
Without a 1099-B from coin exchanges, coin traders are on their own when it comes to trade accounting.
How our service works
We download your coin transactions into coin accounting software and generate Form 8949 You can give this Form 8949 and other tax reporting to your tax preparer or our CPAs for our tax compliance service.
Want a quote?
Email us a list of your coin exchanges for the year 2017. Tell us the type of trading you did and how you spent coin during 2017.
Our trade accounting service averages 2 to 3 hours per year. The number of hours is contingent on the number of coin exchanges you used and if the imports go smoothly.
We have a good idea of total cost after we spend the first-hour reviewing your files and situation. So purchase that one hour to get started.