First of all, please upvote for visibility + more opinions – this concerns all of us*. Also, if you’re actually stupid enough to think you’ll get away with avoiding tax’s despite KYC’ing to Coinbase, Binance, Gemini, and others please don’t bother commenting. News flash! you’re gonna end up paying that tax in the long run + huge fines eating into your gains (or even putting you into debt) and I personally don’t want to fuck around with the IRS.
The other day I came across this news article and realized that the IRS is actually coming after people who have KYC’d into Coinbase / Gemini but didn’t report any crypto on their taxes… unfortunately, that describes my situation, so I’m trying to get ahead of getting a notice from the IRS.
I started trading crypto in 2017 during the first bull run. I was stupid (like everyone else), and was trading in and out of a ton of different coins across Binance by first buying bitcoin in Coinbase then sending it to other exchanges to trade. I literally have thousands of transactions from 2017 that I didn’t even think to report on my taxes (because I lost any profits I made in 2018 when the market sank).
My problem is that to get squared away with my tax reporting, it looks like I need to go back and amend all of my prior years tax returns (2017, 2018, 2019) to include my crypto gains and losses in US Dollar terms. Sounds easy right? Turns out this is a mind-fucking impossible problem because trying to figure out what the prices in USD terms for all of my trades is next to impossible. I literally have thoousands of trades to account for.
I have come across crypto tax software tools like CryptoTrader.Tax and Bitcoin.Tax which actually appear to be very slick, but I feel a bit hesitant to give quasi-unknown companies full read access to my wallet addresses, portfolio amount, personal email address etc.
What are you guys doing to calculate your crypto taxes and have you been reporting since you started trading?? Has anyone else received a letter from the IRS? Am I fucked?
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