Time to poll/address crypto taxes again

[felly]

I've asked here for the past 2 years with little to no response other than "U nEeD aN aCcOuNtAnT".

So with tax season around the corner, I will try again.

Who is or has filled taxes in regards to crypto capital gain/loss? Is it an automatic tip off for an audit? Did you prepare it or did a professional do it.

I do have an accountant that handles my personal and business taxes. However he is still learning the realm of crypto (a baby boomer who's trying his damn best to keep up). He has been very good to me in terms of tax prep pricing and I want to stay with him. So I always try to make things easier for him prior to tax prep.

I currently hold about $25k in crypto. Amassed from 2017 through to 2019 via mining, cash purchase and staking. Holding since. Using crypto tax software and reporting correctly, however large chunks of data missing due to exchanges going under. Not sure what to do about that, but doesn't matter too much until fiat trade is to take place (tbd).

Anyway, I'm generally looking for people that have experienced the process, setbacks, successes along with tips.

 

[eb231]

@felly For that small of an amount I would not waste a ton of time on it.
I would treat the mining portion as business basically. Record your costs from mining, electric and hardware costs. Subtract that from what your earnings are for the year as of Dec 31st.
What you invested with cash should be treated as you would the same way an unregistered stock account would be treated.
Of course your crypto is not actual profits( or losses) until you have cashed out.
Keep good records and you should be fine. Again for such a small amount your tax owing will be negligible.

 

[felly]

@eb231 It's worth was $190k 2 years ago. Crypto is in a bear cycle (along with the traditional market) right now. I'll be holding until a bear market emerges. DCA is $0.12. Current value is $0.33. ATH is $3.10.

Not such a small number when I'll be cashing out.

 

[eb231]

@felly Wait till that time but right now it is not worth that.
If it returns to its highs then take your profit out.
I learned the hard way on that as well. My account is a pretty sad affair right now.
I am not worried about taxes on my accounts until I actually cash out. I have been in since about 2015.

 

[felly]

@eb231 2017 for me. Just in time to ride the 2018 crash all the way down.