US IRS tax reporting for cryptocurrencies


#364

Kortik;

I’d be really careful with what you originally said before editing it after I had answered your question. The article states that " the IRS specifically states that wash sales only apply to stocks and securities."

My understanding, as a CPA, of most crypto (excluding bitcoin or Ethereum) is that it is a security and therefore would be subject to wash sale rules.


#365

yes if securities then defiantly wash sale rule. is BTC security?


#366

That’s standard tax law

Well, not quite. If you have, say, $7,500 in losses you can either 1. (presuming you have substantial gains) take them as an offset to your gains, or 2. take them in subsequent years up to a total of $3,000 of total losses each year. eg: $3,000 in 2018, $3,000 in 2019, and then $1,500 in 2020 presuming that you have no other capital gains against which to offset those losses.


#367

BTC was classified by the SEC a few months ago as a currency so trading currencies falls under the CFTC’s domain, not the SEC.

But the taxation is relatively simple (all gains and losses are short term) AND almost identical IRS wash sale rules apply here.

Sorry.

I suggest you do a google search on taxation of gains from currencies.


#368

well pdf file on the irs site states that btc is property

https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies

Q-1: How is virtual currency treated for federal tax purposes?
A-1: For federal tax purposes, virtual currency is treated as property. General tax
principles applicable to property transactions apply to transactions using virtual
currency.
Q-2: Is virtual currency treated as currency for purposes of determining whether
a transaction results in foreign currency gain or loss under U.S. federal tax laws?
A-2: No. Under currently applicable law, virtual currency is not treated as currency that
could generate foreign currency gain or loss for U.S. federal tax purposes.


#369

Kortik, Taxable property.


#370

wash sale rule applies to taxable property then?