Current Tax Rules for Crypto-Assets
As you may have heard, the government is looking closely at crypto-currency and crypto-asset markets, contemplating additional reporting requirements for taxpayers who invest, earn, buy and sell services and items with crypto-assets. Many taxpayers have waded into this type of investment and may buy and sell services or items using cryptocurrency.
For the upcoming 2022 tax season (2021 tax year), we want to make you aware of additional information we will request regarding your crypto assets. Some of you may have crypto wallets or accounts on a platform (i.e., CoinBase, Celsius Network, Kraken, etc.), allowing you to transact purchases and sales with cryptocurrencies. These platforms are great at tracking transactions, giving you real-time market values of your portfolio and detailed lists of all transactions; however, they do not summarize the information into usable data for tax reporting.
Even if you have only a few crypto-asset transactions, we highly recommend integrating the data from your crypto-asset wallets and accounts into a crypto tax reporting platform to analyze the transactions and provide summarized reports for tax return preparation. Some of the crypto tax reporting platforms available are Koinly, CoinTracker, Accointing, Cry.ptoTrader, and ZenLedger, to name a few. We suggest trying various crypto tax reporting platforms soon to see what works best for you, so you are not scrambling come tax time to provide the information needed.
In addition, the article linked below from the AICPA explains the current state of crypto assets taxation with more regulations on the horizon.