Crypto-Currency Tax Reporting

Over the last few years, Bitcoin has become the most widely circulated digital currency or e-currency in the world.  We have been handling Bitcoin purchases and sales for our clientele for years.  Now that this platform has blown up and there are hundreds of new Crypto-Currencies on the market, we understand our clients' new challenge to keep up on IRS reporting responsibilities.  We can help reduce that stress and anxiety for you as well as help determine the impacts these transactions have on your tax liability.

At Fox and Associates, Inc, we can customize a Crypto-Currency Reporting package to suit the overall needs and requirements of each taxpayer, from light investor, to day trader to mining.  We have specialized software that will allow us to track all reportable transactions, including those for income or expense related transactions, up and beyond your basic trades, sells and purchases.  We pride ourselves on our "Audit-Ready" attitude so that you're confident about always being in full compliance with the IRS.

Crypto-Currency Trading

The IRS considers crypto-currency to be "property" or "capital assets", similarly to how they treat stocks sales.  As such, EVERY SINGLE EXCHANGE of virtual currency is a reportable transaction on Sch D/ Form 8949.  How long it was held determines the tax rate you will pay.  Click below for a more detailed introduction to Crypto-Currency taxes.

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Traditional Income Paid in Bitcoin

Crypto-Currency received in lieu of USD is still income to the taxpayer, and must be reported as such.  This would be IN ADDITION to any reporting required for the trading or exchange of that same crypto-currency. The receipt date and USD value is crucial to reporting the "Sell" correctly in the future.  Click below for information on how this works.

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Spending Altcoins

If you use your altcoins to purchase goods/services, this is also a "Sell" of your virtual currency.  Anytime you give up one crypto-currency for something different, it is a reportable transaction.  Good news is if it is spent on a legitimate write-off, we may still be able take it as a deduction (based on FMV in USD).  See below.

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Fines and Penalties

The IRS is specifically targeting virtual currency transactions due to the potential for abuse by taxpayers that is presented by this technology. They are aware taxpayers may use this to conceal income and assets ILLEGALLY reducing their tax liability.  Click below to read about some of the fines and penalties in place already! 

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What our customers are saying

I've made so many trades, I don't know how they do it! In this confusing new virtual world, they know how to keep it simple.  I don't worry about an audit, as I know Fox and Associates is making sure to report all my activity correctly and accurately. Thank you for letting me focus on my investments instead. 

Michael - Crypto-Currency Investor