Neil E. Kelley has been in the derivatives trading and taxation business since 1978.
If you qualify for trader tax status you may be able to file amended Schedule C for the last 3 years and claim your trading expenses. Going forward you may be able to make a Section 475 election and have your securities, option and coin trades taxed as marked-to-market. This will convert your gains/losses from capital to ordinary. Effectively putting yourself in position to claim income offsets in the future for tax paid by utilizing a net operating loss carryforward. You will also avoid getting stuck with a capital loss carryover - only being able to deduct $3000 of the loss per year.
The Internal Revenue Service has issued very little guidance. In 2014 the IRS decided that cryptos are property - not currency. Consequently gains and losses are treated as capital in nature.The basic rules are: You have a capital gain/loss if you 1) sell for fiat 2) exchange for coin 3) spend the coin. You can gift coin and not be taxed as long as the annual gift is less than $15,000. The gift recipient will then assume your basis. You can make a charitable donation of coin and receive a tax deduction of the dollar value of the coin at the time of donation - if the recipient accepts coin.
Henry Baffert Minneapolis MN Jan 2018
I have been buying and trading crypto since 2010 and had no idea what the tax consequences could be. I recommend Mr. Kelley. He is both a trader and tax pro. Been involved in airdrops and faucets some mining and Bitconnect lending (did not turn out well). Will go back again.
Lois K. St.Paul MN Dec 24 2017
A relative had passed recently and since I was the only family member that knew anything about bitcoins :? Heexplained the whole process to me bitcoins wallets money in out taxes
My uncle had some bitcoin. Got a lot of good advice.
Neil , I just wanted to tell you how happy I am with your very thorough work. I will be a returning customer.
Taylor Inver Grove Heights MN March 2018