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  • Crypto Tax question

    I've made over 1500 transactions in 2021.
    I receive a 1099 form from 4 platforms: Celsius, Kraen, Coinbase and Nexo
    I've used Crypto Trader to general ONE report that includes everything.
    My CPA says that we should report the 1099 into the "1099 slots" for those 4 platforms as if we didn't it will show to the IRS that we didn't report this money.
    On the other hand, if I remove these 4 platforms from the software reports, there will be a lot of missing transactions and original source of coins which will trigger more taxes.

    Anyone with a similar problem?
    Thanks

  • #2
    Originally posted by chrisg202 View Post
    I've made over 1500 transactions in 2021.
    I receive a 1099 form from 4 platforms: Celsius, Kraen, Coinbase and Nexo
    I've used Crypto Trader to general ONE report that includes everything.
    My CPA says that we should report the 1099 into the "1099 slots" for those 4 platforms as if we didn't it will show to the IRS that we didn't report this money.
    On the other hand, if I remove these 4 platforms from the software reports, there will be a lot of missing transactions and original source of coins which will trigger more taxes.

    Anyone with a similar problem?
    Thanks
    Nope, don't have that problem.

    Did you do anything else this year besides put transactions into a computer? That's like 5 transactions a day.

    I agree with your accountant that you should use the 1099s you're given.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3
      “On the other hand, if I remove these 4 platforms from the software reports, there will be a lot of missing transactions and original source of coins which will trigger more taxes.”

      Lost me there.

      Comment


      • #4
        Originally posted by Tim View Post
        “On the other hand, if I remove these 4 platforms from the software reports, there will be a lot of missing transactions and original source of coins which will trigger more taxes.”

        Lost me there.
        EXAMPLE:
        If you bough Etherium on Coinbase then you moved it to Metamask and exchanged (traded it) for any ERC20 token, then move it Voyager to sell it.
        If I remove Coinbase transactions from the software, it will consider the new deposit to Voyager a gift (or air drop) since there is no cost basis records for it.

        Comment


        • #5
          you owe the tax on the actual realized gains. Which as you say isn’t reported on the 1099s bc you’re moving coins around so the exchange where you sold doesn’t know the basis. So you should still submit the 1099s but then you and your cpa will need to make an adjustment to report actual realized gain (or loss). Good luck.

          Comment


          • #6
            Originally posted by jacoavlu View Post
            you owe the tax on the actual realized gains. Which as you say isn’t reported on the 1099s bc you’re moving coins around so the exchange where you sold doesn’t know the basis. So you should still submit the 1099s but then you and your cpa will need to make an adjustment to report actual realized gain (or loss). Good luck.
            Sounds like a lot of fun for 1500 transactions.

            Comment


            • #7
              I know they have programs that are supposed to handle all of this but it still seems like a massive headache.

              Comment


              • #8
                Originally posted by chrisg202 View Post

                EXAMPLE:
                If you bough Etherium on Coinbase then you moved it to Metamask and exchanged (traded it) for any ERC20 token, then move it Voyager to sell it.
                If I remove Coinbase transactions from the software, it will consider the new deposit to Voyager a gift (or air drop) since there is no cost basis records for it.
                Oh my goodness, what a mess. Did you know your taxes were going to be this messy and decide it was worth it or was this all a surprise? How much is your tax preparation going to cost due to this?


                you owe the tax on the actual realized gains. Which as you say isn’t reported on the 1099s bc you’re moving coins around so the exchange where you sold doesn’t know the basis. So you should still submit the 1099s but then you and your cpa will need to make an adjustment to report actual realized gain (or loss). Good luck.
                I think this is the right answer. Keep a good paperwork trail as this feels ripe to be audited, but that seems the right way to deal with it.
                Helping those who wear the white coat get a fair shake on Wall Street since 2011

                Comment


                • #9
                  if you think this situation is a mess this is only the tip of the iceberg for many. Staking tokens on defi, token swaps, airdrops, NFTs, lol

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                  • #10
                    Originally posted by chrisg202 View Post
                    I've made over 1500 transactions in 2021.
                    I receive a 1099 form from 4 platforms: Celsius, Kraen, Coinbase and Nexo
                    I've used Crypto Trader to general ONE report that includes everything.
                    My CPA says that we should report the 1099 into the "1099 slots" for those 4 platforms as if we didn't it will show to the IRS that we didn't report this money.
                    On the other hand, if I remove these 4 platforms from the software reports, there will be a lot of missing transactions and original source of coins which will trigger more taxes.

                    Anyone with a similar problem?
                    Thanks
                    Oh my, you've certainly been a busy bee this past year!

                    First thing that comes to mind (aside from I'm glad I don't have your mess on my hands): did you track your returns with all of this fiddling, and if so, what were they?

                    Comment


                    • #11
                      Try explaining to all the geniuses down in DC, why you 1099s are incorrect , but you calculations are much better and you should not have to pay all the short term gains taxes.

                      Comment


                      • #12
                        The 1099s won’t necessarily be incorrect. They will be incomplete. They may have a total realized amount but with basis unknown and taxable amount undetermined. It is perfectly reasonable to report the true gain (or loss) amount and pay the appropriate tax. But you better be prepared to defend with documents in the case of an audit.

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