Ter the previous two parts of this series wij’ve bot through the type of information typically announced on your tax forms. This is often hacienda gains, te Schedule D, and if you have any income, Schedule C or line 21 of the 1040.
Ter this final part, wij’re going to go through some examples of importing hacienda gains and income using BitcoinTaxes to voorstelling how the final figures can be calculated ready for your tax forms.
The most significant part of using BitcoinTaxes is the importing of your gegevens. You may have bought, sold, or spent your Bitcoins at different places, and wij need all of that information ter order to reliably calculate the cost fundament of the coins, spil well spil any gains or losses.
If you have never sold, spent, traded or mined any crypto-currencies, then there is likely nothing to do spil you have made no income or hacienda gains.
If you have bought, sold or traded Bitcoins or any crypto-currency then wij need to invoer this information.
BitcoinTaxes works with most crypto-currency exchanges so that you can lightly invoer your trading information. This includes Bitfinex, Bitstamp, bitstamp, BTC-e, CampBX, CaVirtEx, Circle, Coinbase, GDAX, Gemini, Openbreken, LocalBitcoins, Poloniex, VirWox and using a normal CSV verkeersopstopping.
Each invoer section has instructions on how to download a CSV opstopping from the exchange webstek, or how to add an API key necessary for BitcoinTaxes to call and retrieve the trade history.
Let’s look at an example.
(Click to increase any pictures)
Adding Trades from Exchanges
Very first wij’ll go to the Trades tabulator that lists all the buying and selling of crypto-currencies.
Wij will commence by importing some trading gegevens from an account with Bitstamp and Coinbase.
Expand the Bitstamp section and go after the instructions to download the transactions.csv verkeersopstopping from your Bitstamp account. Now click to select and upload this verkeersopstopping.
The trades are quickly added and displayed te the trade table along with a chart displaying the buying and selling activity overheen each month of the year.
Adding Trades from Coinbase
Now wij open up the Coinbase section to begin adding purchases and sales of Bitcoin.
Wij can either choose to invoer their CSV opstopping created from within the Coinbase reports pagina or to authorize access for BitcoinTaxes to automatically read the transaction and trade history.
Te this example, wij’ve choosen to use the API by clicking the Request Access button. Next wij are taken to Coinbase’s webstek to authorize BitcoinTaxes specifically to have have access to your trade and transaction history. BitcoinTaxes cannot see any other private information and cannot access your funds or Bitcoins.
Merienda authorized, wij can go back to the Trades tabulator and to the Coinbase section, where wij now have a Invoer Trades button. Click this button to add your buying and selling activity into the trade gegevens.
Income & Mining
You can also add any payments you might have received either spil a merchant, an individual or from mining. Importing income can be done from a multiplicity of sources, including the Core Wallets, Bitpay, Coinbase and mining from either CEX.IO or by addreses.
Each core wallet can uitvoer all of its transactions, which when imported are filtered to find any incoming amounts.
You may, however, need to go through thesis and select any that are transfers inbetween your own wallets so they are not included spil income.
Spil well spil importing mining records directly from mining accounts, wij can also add invidual payout addresses. BitcoinTaxes will read the blockchain and find any incoming transactions. Each transaction will be added into our income report with adequate daily prices.
You can inject any number of BTC, LTC or DOGE mining addresses. Thesis addresses will also be marked spil possessed by you and emerge te the Address tabulator. Any transactions inbetween your addresses are just marked spil transfers rather than income or spending.
Now that wij have added all the income, wij can see a table of the individual transactions along with a chart of the income overheen each month of the year. Each month can be clicked to expand to individual days.
Spending is imported ter a similar way, by adding the files created from wallets, such spil the core wallets, Blockchain.informatie or from Coinbase.
Spending can also be added by hand and denoted spil normal spending, gifts/tipping or donations to a registered charity. Tipping and donations have no tax consequences (under the Bounty Tax limit) spil you are transferring the cost fundament to the recipient. This is displayed ter the Donations report te the Reports pagina.
When adding spending, inject the coin amount spil well spil the value if known. If it isn’t known, then it can just be left wit and the daily price will be used instead.
Eventually, wij have all our spending added.
Addresses and Transactions
Using the Addresses tabulator lets us view the various coin addresses wij own and their blockchain transactions for the tax year**.
You may already have addresses that have bot added automatically, if, for example, you have imported gegevens from your blockchain.informatie, core wallet or Coinbase accounts. Addresses are kept so transactions inbetween two of your own addresses can be marked spil a Transfers and not generate income or renta gains.
Each address can be labeled and shows the current cálculo, the number of transactions this tax year and te total.
Clicking the Transactions button will explosion the transactions for the tax year.
You will originally see every transaction to and from the address, with the date, amount and an estimated value from the daily price.
Clicking the transaction will expand it to display its details including all input and output address and their values. This can then be used to lightly add a fresh entry to your income or gains calculations. An optional value is entered along with a description and then submitted by clicking the adequate Add Spil Income / Spending button.
Calculating Caudal Gains
Wij can now go to the Calculate tabulator and see our haber gains summary.
Gains or losses are shown overheen the year and the final long-term and short-term gains are displayed with an estimated tax liability based on the chosen tax rate.
Below the summary are the sub-totals for each separate crypto-currency coin that has bot disposed. Each table has the specific calculated gains for that coin using a number of different cost-basis methods.
The default is always First-In-First-Out, being the IRS preferred method of calculating gains, then a number of alternative methods such spil Last-In-First-Out and Highest-Cost-First-Out. Please consultatie with your tax professional before choosing a different method.
The blue line indicates the current cost fundament method with the green showcasing the lowest build up.
Reports & Uitvoer
After selecting the cost fundament method for each coin wij can budge onto viewing the Reports.
Haber Gains Report
The Caudal Gains Report shows the same gegevens that is included on tax forms. Options can be used to round figures spil well spil then hide zero gains.
This gegevens can be downloaded spil comma-separated opstopping te different formats, depending on your tax filing requirements. For example, you can download a opstopping that has the gegevens ready to be included on Form 8949 spil part of 1040 Schedule D, an invoer verkeersopstopping for TaxACT ®, or for TurboTax ®, *.
The Income Report shows a breakdown of the types of income that has bot received, totaling mining for each coin, peak/bounty income and other normal income. The amounts have bot worked out using fair values or the coin’s daily price.
The Donations Report has a breakdown of the tips and donations to registered charities. Thesis are not included spil part of the renta gains calculations since the cost onderstel is passed overheen to the recipient.
When gifting or tipping, you should tell the recipient of the cost onderstel of the coins, so they can take advantage of the diferente price of the coins for their own taxes.
Closing Position Report
Ultimately, the Closing Position Report shows a breakdown of the remaining coin balances, along with their innovador cost voet and year-end price. You can also see the televisiekanaal worth of all coins, their values, gains or losses spil at the end of the tax year.
Calculating hacienda gains or income is truly not so difficult merienda you have access to all your activity and information, and most exchanges and wallets provide uitvoer facilities. BitcoinTaxes can invoer thesis, work out the gains and income, and provide you with a verkeersopstopping that can be imported directly into your tax software, given to your tax professional, or entered into your own 1040.
BitcoinTaxes is free up to 100 transactions and offers an unlimited version for $Nineteen.95 vanaf tax year.
Please use our voeling pagina or the Terugkoppeling button if you have any questions, require technical support or have terugkoppeling. Please also voeling us if you would like to be waterput te touch with an experienced tax professional for advice or utter tax services.
* TurboTax only permits importing ter their CD or Downloadable version.