If you're new to crypto taxes, a great place to start is reviewing the most recent IRS tax guidelines.
Last October the IRS issued long awaited clarifications on virtual currency, digital assets and cryptocurrencies including additional guidance on tax treatment for digital currencies and reminds US taxpayers of their obligations to report cryptocurrencies.
Here is a summary of what you need to know: The IRS guide addresses a few major things including, how to calculate taxable gains when selling cryptocurrencies and acceptable methods for valuing cryptocurrency that were received as income. Bitwave is up to date with the with all IRS guidelines and our tools can be used to make sure you comply with the latest from the IRS.
Taxable Gains and Cost Basis Tracking
If you know Bitwave, you know we are all about making it easy for you to accurately track the cost-basis of your crypto.
The October 2019 IRS updated guide clarifies how to determine the cost basis of coins received as income, such as from mining or the sale of goods and services. Cost basis should be calculated by summing up all the money spent to acquire the crypto, “including fees, commissions and other acquisition costs in U.S. dollars.”
The fair market value of the crypto purchased on an exchange is determined by the amount the exchange sold it for in U.S. dollars. Bitwave makes it easy for you to track the cost-basis and we have several ways to for you to determine the fair market value including automatically pulling ina weight market average from leading cryptocurrency exchanges.
Bitwave is here to help you track all of your crypto transactions which will make properly reportedly crypto gains and losses a whole lot easier!
Helpful Links:
https://www.irs.gov/newsroom/virtual-currency-irs-issues-additional-guidance-on-tax-treatment-and-reminds-taxpayers-of-reporting-obligations
FAQs: https://www.irs.gov/newsroom/frequently-asked-questions-on-virtual-currency-transactions
Disclaimer: The information provided in this blog post is for general informational purposes only and should not be construed as tax, accounting, or financial advice. The content is not intended to address the specific needs of any individual or organization, and readers are encouraged to consult with a qualified tax, accounting, or financial professional before making any decisions based on the information provided. The author and the publisher of this blog post disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use or application of any of the contents herein.
