US IRS tax reporting for cryptocurrencies



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.


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

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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.


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.


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


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

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
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.

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Kortik, Taxable property.

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wash sale rule applies to taxable property then?

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What’s the best crypto website or software to use right now for taxes? I’m currently using cointracking?

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cointracking probably the best out there.


ZenLedger is really nice. Cointracking is nice, but I didn’t get accurate imports. is what I ended up using as it was the most accurate for me.

#374 is what I used as well


I used Worked easy!


I ended up using The exchanges I use are supported on this website (pull purchases/trades/etc via the exchange API). There was some reviewing that had to be done to ensure there weren’t any typos (took 4-6 hours). But overall, it gave me the information I needed.

I also wanted to go through a CPA but there wasn’t any in my area that really understood crypto. Well, there’s one guy but he’s basically charging $1k to file taxes. So, I went through turbotax (though I was consistently talking to someone who works in the IRS to make sure I wasn’t screwing myself over). I think it’ll turn out ok considering my crypto only lost value when I traded (trading meaning I traded for alt coins on DCA day).


Did you review the calculations for the cost of the crypto sold??

The calculations must be done either on specific identification or on FIFO basis.


I reviewed to make sure it was done on a FIFO basis. In terms of the cost, I don’t recall what the cost was at the time, but it looked to be right from what was pulled through the API.