How to file the tax amendments to the IRS for the 2017 tax year on cryptocurrency


#1

Hello, after reading the news regarding a trader in California, i’m kind of worried.
So the story goes like this:
A Californian who purchased $5,000 USD worth of ETH for $50 each in May 2017, and later put his ETH into some other ICOs. His portfolio quickly raised to $880,000 USD at the peak in December 2017. He decided to HODL and thought he could get away with “like-kind” exchange because he held all his coins and didnt put it back into Fiat. He went without filing tax for his cryptocurrency profits in the 2017 year.

I am in a similar situation like him, and i talked to my CPA last year who did my tax return, he insisted that i do not have to file tax on cryptocurrency because i can use the “like-kind” exchange excuse and because what i have invested in and reinvested was very insignificant maybe around $4~5k USD in profits by the end of 2017. Right now, i talked to another CPA and he said i have to file an extension and his rate is crazy like $200/hr. he also talks me into having a cryptocurrency Lawyer to write a letter for 5k USD for the “tax opinion.” So that he can actually start doing my amendments for 2017 tax year. I felt like this CPA is another Bitconnect :smiley: (Just kidding). What are your opinions on what i should do?


#2

Even if you decide to use like kind for cryptocurrency trades, it still needs to go on your tax return. I wouldn’t recommend like kind but here is the like kind tax form that needs to be filled out for every trade.

The first CPA doesn’t know what he is talking about.
Unfortunately, the second CPA might.
That said, there are professionals doing this that may charge less. You will have to look deep for them.
Either way, like kind can not be used in 2018.

And- the IRS did post on their website that crypto holders need to report crypto on their tax return.
They didn’t mention which form but I expect it to be as a taxable event per the details.

https://www.irs.gov/newsroom/irs-reminds-taxpayers-to-report-virtual-currency-transactions


#3

Here’s the other CPA in the group who also warns against using

In defense of the first accountant I’ve even heard very smart tax lawyers say that you can use this tax saving device. The IRS, as an institution, does not agree with these so called experts.

Just say no.
image


#4

I should clarify-

What I mean is that using Like Kind excuse doesn’t exempt one from putting it on the tax return.

Crypto information still has to go on the return.
However if you are doing Like Kind, fill out the Like Kind form for your taxes. If you are reporting capital gains, fill out the 8949.

Either way, the information SHOULD be included on your tax return.

How does anyone expect to defer gains if they hadn’t reported it in the first place? That could look like tax evasion.


#5

anyone here would help me do a late filing for cryptocurrency gain/loss ? if yes, what are your rates? i’m in CA.


#6

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#7

I sent you a message