Cryptocurrencies like Bitcoin and Ethereum have become increasingly popular investments and tax reporting for crypto gains and losses can seem complex. However, with TurboTax, reporting cryptocurrency transactions doesn’t have to be difficult. Here’s a guide on where to enter crypto information in TurboTax.
TurboTax has made it simple for cryptocurrency investors to report their gains and losses from trading, selling, exchanging or even earning crypto from mining or staking rewards. Whether you’re a beginner or experienced crypto investor, TurboTax guides you step-by-step on where to enter your cryptocurrency transactions so you can file an accurate tax return.
Where To Report Crypto in TurboTax
Selling or Trading Crypto
- From the main menu, select “Income and Expenses” then choose “I sold or traded investments”
- Choose “Cryptocurrency” as the type of investment you sold or traded
- Enter the details for each crypto sale/trade transaction including date acquired, date sold, sales proceeds, cost basis, gain/loss. TurboTax will automatically calculate capital gains/losses.
- Continue entering all crypto transactions. TurboTax will carry capital gains/losses totals to your Schedule D.
Earning Crypto from Mining, Staking, Airdrops
If you earned cryptocurrency from mining, staking rewards, airdrops or hard forks, this is taxable income. Here’s how to report earned crypto in TurboTax:
- From the main menu, select “Income” then choose “I received another type of income”
- Choose “Cryptocurrency” as the type of income you received
- Enter details including date received, type of crypto, fair market value in USD at time received.
- Continue entering all earned crypto amounts. The totals will carry to your 1040.
Converting Crypto to Fiat Currency
Exchanging your cryptocurrency for fiat currency like USD is a taxable event. Here are the steps for reporting crypto-to-fiat transactions:
- From the main menu, choose “Income and Expenses” then select “I sold or traded investments”
- Select “Cryptocurrency” as the investment type
- Enter details on the crypto-to-fiat transaction including date exchanged, proceeds in fiat currency, cost basis of crypto exchanged.
- TurboTax will calculate the capital gain or loss. Totals carry to Schedule D.
Purchasing Crypto with Fiat
Buying cryptocurrency with USD or other fiat currency is not a taxable event. However, you should keep records of these transactions as they impact your cost basis when you later sell or exchange that crypto.
5 Frequently Asked Questions
1. Do I have to report crypto if I only purchased but didn’t sell?
No. Simply purchasing and holding cryptocurrency is not a taxable event. You only need to report cryptocurrency if you sold, exchanged, or otherwise disposed of it for fiat currency or other crypto.
2. What if I lost money on crypto trades?
Losses on cryptocurrency trades can be deducted on your tax return. Report these transactions in TurboTax as described above. Short-term losses offset short-term gains, long-term losses offset long-term gains.
3. What is the cost basis of crypto I received from mining or air drops?
Your cost basis for mined or air dropped crypto is the fair market value in USD at the time you received the cryptocurrency. This forms the basis for calculating capital gains or losses when you later dispose of the crypto.
4. Should I report crypto stored in wallets?
You do not need to report cryptocurrency held in wallets as long as you did not sell, exchange or dispose of it during the tax year. Crypto held in wallets is not taxable.
5. Can I import crypto transactions from exchanges?
Yes. TurboTax allows you to import crypto transaction data directly from many major exchanges like Coinbase, Gemini, Kraken, and others. This can save significant time.
Reporting cryptocurrency transactions doesn’t need to be confusing or complicated with the step-by-step guidance provided in TurboTax. Whether you sold, traded, bought, earned or converted crypto, TurboTax makes it easy to accurately file your crypto gains, losses and income. Following the simple steps outlined above will ensure you meet your tax filing requirements for cryptocurrency. For additional support, consult a tax professional.