• About
  • Blog
  • Contact
Sunday, June 4, 2023
No Result
View All Result
The Daily Buzz
  • Home
  • Alternatives
  • World
  • Politics
  • Business
  • Science
  • Tech
    • All
    • Activate
    Title: How to Start a Business Platform Like Patreon in 2023: the New Era of Content Monetization
    Title: How to Start a Business Platform Like Patreon in 2023: the New Era of Content Monetization
     Revolutionizing Retail: the Power of Pos Systems for Independent Retailers
     Revolutionizing Retail: the Power of Pos Systems for Independent Retailers
    Why Your Business Should Only Work With a Reputable SEO Agency
    Why Your Business Should Only Work With a Reputable SEO Agency
    The Evolution of Event Technology: Trends and Innovations to Watch
    The Evolution of Event Technology: Trends and Innovations to Watch
    Passive Income Ideas for Techies in 2023
    Passive Income Ideas for Techies in 2023
    Protecting Data & Infrastructure
    Protecting Data & Infrastructure

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
    • Activate
  • Entertainment
    • All
    • Gaming
    • Movie
    • Music
    • Sports
    The Absolute Men’s Swimwear Guide: How to Choose the Best Swim Trunks
    The Absolute Men’s Swimwear Guide: How to Choose the Best Swim Trunks
    The 8 Best-underrated Movies on Netflix Right Now
    The 8 Best-underrated Movies on Netflix Right Now
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Introduction to Game Server Hosting
    Introduction to Game Server Hosting
    5 Reasons to Shop for Toys Online This Holiday Season
    5 Reasons to Shop for Toys Online This Holiday Season
    The Japanese Tanto: What You Need to Know
    The Japanese Tanto: What You Need to Know
    Can You Crossfade Apple Music?
    Can You Crossfade Apple Music?
    What do rips or rip mean? – Letterkenny fandom
    What do rips or rip mean? – Letterkenny fandom
    What Is Ffxiv Parsing?
    What Is Ffxiv Parsing?
  • Lifestyle
    • All
    • Fashion
    • Fitness
    • Food
    • Health
    • Health Care
    • Home
    • Travel
    5 Things to Do Before You Decide to Move
    5 Things to Do Before You Decide to Move
    4 Evergreen Tattoo Styles
    4 Evergreen Tattoo Styles
    4 Major Soft Skills Needed for a Career in Social Work
    4 Major Soft Skills Needed for a Career in Social Work
    Simple  Ways for a Successful Rental Apartment Hunt: Open Doors to Your Dream Home
    Simple  Ways for a Successful Rental Apartment Hunt: Open Doors to Your Dream Home
    Winslow Homer: a Journey Through the Artist’s Worldwide Inspiration
    Winslow Homer: a Journey Through the Artist’s Worldwide Inspiration
    The Top Kitchen Design Colors and Trends for Luxury Homes
    The Top Kitchen Design Colors and Trends for Luxury Homes
    The Basics of Photo Posing
    The Basics of Photo Posing
    5 Ways to Boost Your Airbnb Search Rank
    5 Ways to Boost Your Airbnb Search Rank
    Exercise Equipment Safety Tips
    Exercise Equipment Safety Tips
    The Importance of Reporting Workplace Injuries
    The Importance of Reporting Workplace Injuries

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
  • Home
  • Alternatives
  • World
  • Politics
  • Business
  • Science
  • Tech
    • All
    • Activate
    Title: How to Start a Business Platform Like Patreon in 2023: the New Era of Content Monetization
    Title: How to Start a Business Platform Like Patreon in 2023: the New Era of Content Monetization
     Revolutionizing Retail: the Power of Pos Systems for Independent Retailers
     Revolutionizing Retail: the Power of Pos Systems for Independent Retailers
    Why Your Business Should Only Work With a Reputable SEO Agency
    Why Your Business Should Only Work With a Reputable SEO Agency
    The Evolution of Event Technology: Trends and Innovations to Watch
    The Evolution of Event Technology: Trends and Innovations to Watch
    Passive Income Ideas for Techies in 2023
    Passive Income Ideas for Techies in 2023
    Protecting Data & Infrastructure
    Protecting Data & Infrastructure

    Trending Tags

    • Sillicon Valley
    • Climate Change
    • Election Results
    • Flat Earth
    • Golden Globes
    • MotoGP 2017
    • Mr. Robot
    • Activate
  • Entertainment
    • All
    • Gaming
    • Movie
    • Music
    • Sports
    The Absolute Men’s Swimwear Guide: How to Choose the Best Swim Trunks
    The Absolute Men’s Swimwear Guide: How to Choose the Best Swim Trunks
    The 8 Best-underrated Movies on Netflix Right Now
    The 8 Best-underrated Movies on Netflix Right Now
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Market Size of Mobile Games: Gaming Market Trends and Growth Forecast
    Introduction to Game Server Hosting
    Introduction to Game Server Hosting
    5 Reasons to Shop for Toys Online This Holiday Season
    5 Reasons to Shop for Toys Online This Holiday Season
    The Japanese Tanto: What You Need to Know
    The Japanese Tanto: What You Need to Know
    Can You Crossfade Apple Music?
    Can You Crossfade Apple Music?
    What do rips or rip mean? – Letterkenny fandom
    What do rips or rip mean? – Letterkenny fandom
    What Is Ffxiv Parsing?
    What Is Ffxiv Parsing?
  • Lifestyle
    • All
    • Fashion
    • Fitness
    • Food
    • Health
    • Health Care
    • Home
    • Travel
    5 Things to Do Before You Decide to Move
    5 Things to Do Before You Decide to Move
    4 Evergreen Tattoo Styles
    4 Evergreen Tattoo Styles
    4 Major Soft Skills Needed for a Career in Social Work
    4 Major Soft Skills Needed for a Career in Social Work
    Simple  Ways for a Successful Rental Apartment Hunt: Open Doors to Your Dream Home
    Simple  Ways for a Successful Rental Apartment Hunt: Open Doors to Your Dream Home
    Winslow Homer: a Journey Through the Artist’s Worldwide Inspiration
    Winslow Homer: a Journey Through the Artist’s Worldwide Inspiration
    The Top Kitchen Design Colors and Trends for Luxury Homes
    The Top Kitchen Design Colors and Trends for Luxury Homes
    The Basics of Photo Posing
    The Basics of Photo Posing
    5 Ways to Boost Your Airbnb Search Rank
    5 Ways to Boost Your Airbnb Search Rank
    Exercise Equipment Safety Tips
    Exercise Equipment Safety Tips
    The Importance of Reporting Workplace Injuries
    The Importance of Reporting Workplace Injuries

    Trending Tags

    • Golden Globes
    • Mr. Robot
    • MotoGP 2017
    • Climate Change
    • Flat Earth
No Result
View All Result
The Daily Buzz
No Result
View All Result
Home Finance

Crypto Taxes: How to File Them?

by The Daily Buzz Team
in Finance
4 min read
Crypto Taxes: How to File Them?

It’s been more than a decade since cryptocurrencies like Bitcoin were introduced. However, the tax policies relating to cryptocurrencies still remain unclear.

This rise in popularity is now causing governments to pay closer attention to these crypto assets. According to official IRS guidance, Bitcoin and all other types of cryptocurrency should be treated as property for tax purposes .

Keeping this in mind, cryptocurrency will be treated like property such as stocks, gold or real estate. It is now mandatory to report your capital gains and losses from all your crypto trades when filing your taxes.

If you fail to do so, you will be liable for tax fraud and the IRS will impose a hefty fine.

Contents

What are the Taxable Events for Cryptocurrency?

A taxable event is an action that causes a tax reporting liability. When this event occurs, a capital gain or capital loss is triggered which is required to be reported on your tax returns. When going about how to file crypto taxes, check to see if these events have occured.

  • Trading cryptocurrency to fiat currency (USD).
  • Trading one cryptocurrency for another type of cryptocurrency.
  • Using cryptocurrency to pay for goods and services.
  • Earning cryptocurrency as a form of income (mining).

What are the Non-Taxable Events for Cryptocurrency?

The following events listed below are not taxable when going about how to file crypto taxes.

  • Giving or receiving cryptocurrency as a gift is a non-taxable event.
  • Transferring cryptocurrency between different crypto exchanges and digital wallets (without triggering capital gains and losses).
  • Purchasing cryptocurrency with fiat currency like USD (No gains are realized until the cryptocurrency is traded, used, or sold).

How to Calculate Crypto Capital Gains and Losses?

Step 1:  Determine Your Cost Basis

The most important aspect to understand is when going about how to file crypto taxes is how to determine the cost basis of your holdings. The cost basis is the money which was used to purchase your property.

In the case of crypto assets, the purchase price along with the other costs associated with the cryptocurrency such as transaction fees and brokerage commissions from the crypto exchanges you originally purchased cryptocurrency from.

(Purchase Price of Crypto + Other fees) / Quantity of Holding = Cost Basis

Step 2: Subtract Cost Basis from Fair Market Value

The next step is to subtract the cost basis on the sale price of your cryptocurrency. Sale price is also known as the Fair Market Value. When going about how to file crypto taxes, use the equation below to calculate your capital gain or loss.

Fair Market Value –  Cost Basis = Capital Gain/Loss

What if Money was Lost when Trading Cryptocurrency?

If you incurred more capital losses rather than capital gains when trading your cryptocurrency. You can go ahead and file these losses as part of your tax returns. Many crypto investors strategically sell their crypto assets which incur losses to reduce their tax liability. This approach is commonly referred to as Tax Loss Harvesting.

How to Accurately Determine the Fair Market Value?

The concept of Fair Market Value poses a variety of problems for crypto traders. Many crypto traders have been dealing with cryptocurrency for years without keeping track of the Fair Market Value at the time of trading.

When going about how to file crypto taxes, the Fair Market Value is necessary for crypto traders

to file their taxes accurately. Depending on the number of trades carried out, the process of calculating capital gains can be extremely time consuming and can get out of hand if the trader has not kept track.

This problem seems to be increasing among crypto traders which is why many of them have started using crypto tax softwares which can automate the entire crypto tax reporting process.

When looking for easier ways of how to file crypto taxes, try using a crypto tax software as they can speed up the calculating process and provide accurate information on how much tax you are liable for.

What is the Process of a Crypto Tax Software?

Most crypto tax softwares use a similar process of how to file crypto taxes. These crypto tax softwares import your trading information relating to all details of the cryptocurrencies you have sold or purchased from the supported exchanges and the donations you have received as well as the crypto obtained from activities such as crypto mining.

The trader will be given the option of which accounting method they prefer to use such as First In, First Out (FIFO), Last In, First Out (LIFO), average costing and like-kind treatment. They can also compare all the methods and stick with the one that suits their needs.

This will be followed by a capital gains report which will detail the cost basis of each transaction, sale proceeds and gain, an income report with all the values mined, donation report with cost basis information and a closing report with the net profit and loss automatically calculated.

From here, the trader can attach the report as a statement on their tax returns when going about how to file crypto taxes.

Zenledger

Zenledger is a crypto tax calculator that is known to support all major exchanges and cryptocurrencies. It has the option to automatically fill various tax forms such as Schedule D, 8949, FBAR and FinCen114. Zenledger is 100% IRS compliant and will generate profit and loss statements for you and your Certified Public Accountant (CPA), if required.

CoinTracker

Cointracker is a hybrid crypto asset tracker as well as a crypto tax reporting software. They

have a simplistic interface that visually displays all the crypto assets you own and the trading history associated with it.

When going about how to file crypto taxes, CoinTracker also comes with additional software tools such as a performance tracker which statistically displays a clear picture of your crypto investment and its performance over time.

The Daily Buzz Team

The Daily Buzz combines the pursuit of interesting and intriguing facts with the innate human desire to rank and list things. From stereotypical cat pictures to crazy facts about the universe, every thing is designed to help you kill time in the most efficient manner, all while giving you something to either laugh at or think about!

  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    The Role of a Criminal Defense Attorney in Drug Crime Cases
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    Can I Hire Movers Just to Load a Truck
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    How to Choose the Right Piano Movers for Your Precious Instrument
  • The Daily Buzz Team
    https://the-daily.buzz/author/admin/
    The Importance of Experience When Choosing Movers Near You

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Like us & Receive Daily Updates

Trending Now

  • The Role of a Criminal Defense Attorney in Drug Crime Cases
  • Can I Hire Movers Just to Load a Truck
  • How to Choose the Right Piano Movers for Your Precious Instrument
  • The Importance of Experience When Choosing Movers Near You
  • Tips on Finding a Patriotic Moving Company in Geneva, Il!
  • About
  • Blog
  • Careers
  • Contact
  • Our Team
  • Privacy Policy

© 2020 The-Daily Buzz

No Result
View All Result
  • Home
  • Politics
  • World
  • Business
  • Science
  • National
  • Entertainment
  • Gaming
  • Movie
  • Music
  • Sports
  • Fashion
  • Lifestyle
  • Travel
  • Tech
  • Health
  • Food
  • Our Team
  • Contact
  • About
  • Privacy Policy

© 2020 The-Daily Buzz