US IRS tax reporting for cryptocurrencies


Sorry, I am in the US.


Since you are a taxpayer in the USA you’ll only pay taxes on what gains you have recognized (ie you sold the investments you had held for a while). If you have losses on other investments you can offset your gains with those losses presuming that you also sell them.


Understood. Selling includes trades I’m assuming. Thanks for the clear answer. You’ve been a big help in this thread.


Thank you for the compliment! It does mean a lot.


So i wanted to clear something else up and what what events are taxable in a specific situation.


In this scenario, I THINK the taxable event is on the BTC---->ALTCoin, correct?

So say I bought BTC for $1000 and then traded it for ALTCoin. How is that capital gain tax calculated? If the ALTCoin value went 10x after the trade, does that affect the capital gains, or is the tax on the gain/loss based on what the value of BTC and the ALTCoin was when initiated the trade?


For US citizens the gain is whatever you made on BTC not on the alt, assuming you are still holding the alt.

If BTC is bought and traded immediately for an alt it’s possible you have no gain / loss.

Normal disclosure: get confirmation from your CPA.


I mean i n all honesty my total portfolio is down by 75% as we speak. Can i report losses?


I believe for the US it’s capped at around $3K and any additional losses are rolled forward for future years.


If you are in the US you can only claim the losses if you sold and the value was lower than when you bought it this is a very basic example. Just because your holdings USD value goes up and down doesn’t mean it is a loss. It is not a loss or gain until you convert that holding to another asset such as another crypto or FIAT.

I am not a CPA. This is my understanding from the information provided to me by my CPA and @Peter_Rehm here.


What is the percentage taxed on crypto to crypto trades since that’s a taxable transaction? Is that tax on trades big enough to effect how much you would be making on some sort of short term gain making it better to just do something like DCA and hold something for at least one year to pay less on it?


I think the same rules apply. short term and long term capital gains tax.


Im more nervous about taxes than i am losing money attempting to trade


Yeah, its the main reason i dont trade much. Keeping track is a pain in the ass, so i rather just have the ability to buy with FIAT and hold.


here is another article that could be helpful . Personally I am using for my crypto trade tracking.


How much do they charge for services for taxes?
Generally speaking. Is it a flat rate?


The fee typically depends directly on the complexity of your tax return.


I read that the IRS was allowing Capital Losses to be filed on taxes for up to $3k, then the rest will be amortized to the following tax year. Has anyone read into this further? Me thinks it might be a good play to sell into dirty fiat on the 31st and get back into your position on the 1st. Where are our tax experts?


Thanks Pete!

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That violates the “wash rules”. You’d have to stay out of your position for at least 30 days.


wash rule do not apply to crypto if that crypto is not a security. edited