Navigating the Gray Area: How to Report Cryptocurrency Trades on Your Tax Return (2023 Update)

OK, in 2020 I started minimally dabbling in Crypto. So, I had a crypto exchange and a crypto wallet. BTC would go into my wallet from my exchange at varying times and leave my wallet, turning into dollars.

Anyway, I now have a gains/loss spreadsheet. There are 16 transactions.

It appears I have to treat it as a sale of assets.

Anyway, here's the easy question:

Instead of inputting 16 separate transactions, can I just put in one figure for costs/proceeds (sum of the 16 components for each)? They are all ST.

BTW, my gain is a whopping $101.

Mel

Reply to
MZB
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Yes, you can use Form 8949 to report your short-term cryptocurrency transactions and attach it to your tax return. Form 8949 is used to report capital gains and losses from the sale or exchange of capital assets, including cryptocurrency.

In Part I of Form 8949, you'll enter the total proceeds, total cost, and total gain or loss for all of your short-term transactions. In Part II, you'll enter a summary of your gain or loss for each type of transaction.

You would need to enter "B" in the "Description of Property" column and enter the name of the cryptocurrency, such as "Bitcoin".

It's important to make sure that the information on Form 8949 is accurate and matches the information on your tax return. Make sure that the total gain or loss from Form 8949 matches the total gain or loss reported on Schedule D (Form 1040).

It's also important to keep records of all your transactions, including the date of purchase, date of sale, cost basis, sales proceeds, and any associated fees. This will help you to accurately complete Form 8949 and ensure compliance with tax laws.

If you have any doubts, please consult with a tax professional.

Reply to
Smart Bean

ANYBODY??

MEL

Reply to
MZB

Each sale has to be reported separately. If you have the information formatted the same as the Form 8949, you can attach a pdf to your return.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

Ira, thank you for having the patience to answer my (and others) questions. But next time, can you tell me what I want to hear.

<g>

Mel

Reply to
MZB

I feel your pain.

Ira Smilovitz, EA Leonia, NJ

Reply to
ira smilovitz

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