Preparing For Taxes

Introduction

CoinReporting was designed to be able to provide the exact information you or your accountant needs to file taxes in any country.

CoinReporting is not a substitute for an accountant! In fact, CoinReporting was built for accountants to make their job easy. If you do not feel confident filing taxes yourself, we strongly recommend you contact us and we can set you up with an accountant in your area who knows how to use CoinReporting.

Capital Gains

Most individuals who make a profit on the sale of digital currencies need to report these as capital gains.

In the United States, these gains are reported on IRS Form 8949, but other countries have similar forms. To obtain the information needed for this form, use CoinReporting's Sales of Capital Assets Report. This report contains the exact information you'll need to file.

We hope in the future to be able to generate the exact tax forms you need.

Write-offs From Lost Coins

In most countries, you can treat lost coins as a loss on your tax return. This is particularly important to folks who are claimants in Mt Gox's bankruptcy.

CoinReporting supports writing off these lost coins. Simply create a transaction from the coin account of the proper amount and a destination equity account with an amount of $0. The information will then flow through properly to the Sales of Capital Assets Report.

Goods or Services Income

Businesses or individuals who sell goods or services for digital currency also must pay income tax on the income received from such activity.

The Profit and Loss Statement can be used to calculate this income.

FBAR Form

United States citizens with more than $10,000 held in foreign financial institutions need to file the FinCEN FBAR form.

Exchanges such as Mt. Gox, Bitstamp, and Bitfinex (among others) are likely considered foreign financial institutions. It is unclear whether bitcoin wallets themselves could be considered foreign financial institutions, though we do not believe this to be the case.

The form asks for information about the highest intra-year balance you held in each foreign account. To obtain this information, use CoinReporting's Highest Balance Report.