Traded cryptocurrency in 2021? Here is how to report it on the tax return

According to IRS Notice 2014-21, the IRS considers cryptocurrency to be property, which means they’re taxed similarly to stocks and capital gains & losses need to be reported on Form 8949 and Schedule D.

If all you did was purchase cryptocurrency with U.S. dollars, and those assets have been sitting untouched in an exchange or your cryptocurrency wallet, you shouldn’t need to worry about reporting to the IRS this year.

Reporting is required when certain taxable events come into play (for example, trading one cryptocurrency for another, selling cryptocurrency for fiat dollars or using cryptocurrency to buy goods or services).

You can usually download a transaction report from your cryptocurrency exchange platform, including all of your buys, sells, and exchanges of cryptocurrency in your account.

CONTACT US TODAY if you have any questions or need help with the preparation of your tax returns.

Sincerely,

Maryna Varabyova, CPA

(877) 677-3737

info@vmtaxcpa.com