To listen to the podcast version of this memo, click here https://youtu.be/_b9zF8iDuAk
To read my detailed memo on crypto first, click here https://tinyurl.com/y7slxsx7
Already have questions? Call me on (732) 673-0510
December 31 is quickly approaching.
For this memo, the definition of “Exchange” is simply when you trade your existing crypto currency for anything else. i.e. other crypto, cash, or goods.
Have your Crypto Assets Decreased In Value?
I read much disinformation and outright myths online about crypto currency.
The main myth is that you can take the decrease in value of your crypto assets on your tax return. This is untrue.
You can only take losses on crypto if you actually exchanged that crypto you are holding. And those transactions would need to be executed before December 31.
Why Would We Sell Crypto At A Loss?
If you feel that your crypto currency will not rebound, then taking the losses might be sound financial planning.
You may have other capital assets, including crypto, that you sold at a gain this year and you may be able to offset those gains with these crypto losses.
On January 1 – Download All Income Tax Related Reports & Detailed Transaction Histories
As soon as the year ends, be sure to log onto all exchanges and wallets, and download all pertinent reports and detailed transaction histories. Be sure to save these in both pdf and excel formats if possible. If they are available, download your income tax related gain and loss reports for later reference.
Will The IRS Receive My Transaction History?
Even if you don’t get a year end form from an exchange, I am advising everyone to act as if they did. If anyone tells you to not report your transactions because the IRS will never know about them, IGNORE that person. Their advice puts you at grave risk.
All of this requires expert tax advice and coordination.
To restate the main takeaways from this memo
1) You can only take losses on your crypto investments if you exchange them. Crypto you are holding that is decreasing in value, but not exchanged, will NOT give you a tax deduction.
2) Assume the IRS will get all the details of your crypto transactions.
Click here to request a consultation or ask me a question.
Please reach out to me without hesitation with any tax, business or
accounting question, and to schedule a consultation.
Tax Laws are complex.
It is very easy to make mistakes that can incur penalties.
Do you have a Tax, Accounting or Business Question?
Call Me Immediately. (732) 673-0510.
Is your CPA or Attorney
ignoring your Phone Calls and Emails?
Call Me Immediately. (732) 673-0510.
Remember,
“If We Aren’t Working For You, Then You Aren’t Working At Your Best”
Chris Whalen, CPA
(732) 673-0510
81 Oak Hill Road
Red Bank, NJ 07701
www.chriswhalencpa.com
Red Bank • Rumson • Colts Neck • Holmdel • Middletown • Lincroft • Brick • Toms River • Sea Bright • Deal • Little Silver • Long Branch • Asbury Park • Bradley Beach • Belmar • Brielle • Eatontown • Fair Haven • Farmingdale • Highlands • Atlantic Highlands • Howell • Locust • Monmouth Beach • Shrewsbury • Spring Lake • Tinton Falls • Monmouth County
#cryptocurrency #Crypto #CryptoNews #cryptocurrencynews #IncomeTax #irs #cpa #TaxReform #amnesty #taxrelief #potus
Podcast: Play in new window | Download
Subscribe: RSS
