Sanela Mlaco

[Clinton Donnelly @CryptoTaxFixer]

The purpose of the 1099DA is to inform the IRS about income you've made. Transitioning to this system will be tough, so let's put it in perspective.

If you're an investor in stocks or bonds, you probably use a brokerage like Fidelity or Merrill Lynch. You buy and sell everything through that platform. Even if you use a second platform, you're typically not trading between the two. Because all your transactions happen in one place, the brokerage can issue a 1099, specifically a 1099B.

This form reports every sale you've made in that brokerage for the year. Since you bought those investments through the same platform, the 1099B can also show how much you originally paid, allowing it to calculate your gain.

Anyone who's done their taxes with stocks knows that the 1099B is really convenient. All the info you need is right there. It simplifies the process, and it’d be great if we had something similar for digital assets.

Now, if you only bought and sold on Coinbase, and never used a private wallet, you’d get a form like this—called a 1099DA. It would make doing your taxes simple because both the buy and sell prices would be reported on the form.

However, in crypto, the saying goes: "Not your keys, not your coins." So most people don’t leave their assets on exchanges and prefer holding them in private wallets. When you do that, Coinbase can't track your purchase price. As a result, the 1099DA will only report your sale prices, but it won’t include what you originally paid for the asset. That’s the challenge.

For investors with multiple wallets, calculating gains becomes complicated. It’s messy, very messy. If you want to keep things simple, buy and sell everything on one exchange and don’t move it around. The IRS regulations also require taxpayers to keep detailed records of their crypto transactions.

#coinbase #kraken #gemini #uphold #crypto #defi #nft #investing #Investment $btc $eth $sol $ftm $ar $xrp

[Clinton Donnelly @CryptoTaxFixer]

A new aspect of the broker-dealer regulation has changed how crypto calculations are done across platforms. Tools like CoinTracker, CoinLedger, TokenTax, and ZenLedger all have different default settings, which will require you to significantly adjust how you calculate gains and track unused basis.

To help with this, the IRS has introduced a Transition Plan Safe Harbor, which includes adopting a written strategy. @CryptoTaxAudit, we've created a Transition Plan Safe Harbor to simplify this process for you. It’s essential to adopt this plan by December 31st, 2024 to avoid extra taxes, penalties, and interest from the IRS.

Visit https://t.co/bFFlhXW4nu to download the plan. We'll provide a documented PDF for your records, and keeping it in your books is crucial. There’s no cost or obligation. You can always switch to a different plan later if you choose, but at the very least, do yourself a huge favor and adopt a transition plan now.

This plan draws a clear line for unused cost basis from prior trading, giving you a clean start in 2025 and simplifying future calculations.

[Clinton Donnelly @CryptoTaxFixer]

The biggest change in crypto tax calculation is happening this year, and there are important steps you need to take to protect yourself.

These changes are the result of new laws passed by Congress, making it crucial for you to safeguard your finances.

To do this, you must adopt a transition plan. Failure to adopt one before December 31st could lead to extra taxes, penalties, and interest, according to the IRS.

[Clinton Donnelly @CryptoTaxFixer]

Understanding Changes to 1099-DA Forms for Crypto

With the rise of digital assets, the IRS has updated its approach to tax reporting.
In 2021, the Inflation Reduction Act added Section 6045 to the tax code, mandating the IRS to collect information returns on digital assets. This was a significant legislative step targeting cryptocurrency transactions.

Post-legislation, the ball is now in the IRS's court to develop regulations and forms (like 1099-DA) that align with the law's requirements. These forms are crucial for reporting digital asset transactions accurately.

Can You Influence Changes? Yes, and no. While the law itself is set, the IRS does provide a draft version of the 1099-DA on their website, inviting public comments. If you believe the form doesn't meet legal standards, you can voice your concerns.

Find the draft 1099-DA form and instructions for submitting feedback on the IRS website. Your comments should be directed to the specified email, often listed under a specific code like NFT 1099 D8.

Realistically, the IRS has been refining this form for years and might have already settled on its format. However, operational challenges related to system overloads from the new reporting requirements might prompt further revisions.
The introduction of the 1099-DA is expected to drastically increase the volume of reports, potentially 20-50 times more than all other types of 1099s combined. This puts a huge strain on IRS systems, which could delay processing.

One of the most sensitive aspects of the 1099-DA forms is the likely collection of digital wallet addresses, which could raise privacy issues given their detailed nature.

While you can submit comments on the 1099-DA form, the IRS's need to comply with new legal requirements and manage an enormous influx of data might limit how much they can adapt the form based on public feedback.

Stay informed and prepared!

#crypto #defi #nft #cryptonews #irs #tax #blockchain #bitcoin #ledger #TrezorWallet

[CryptoTaxAudit @CryptoTaxAudit]

If this was you last year. You need CryptoTaxAudit this year.

Don't be like Homer; contact us today!

#crypto #cryptocurrencies #cryptocurrency #CryptoNews #TaxTwitter #irs $btc $eth $xrp $ada $sol $pepe $wif $bnb $tooker

[Clinton Donnelly @CryptoTaxFixer]

If you have received a CP59 notice from the #IRS, it is essential to take this matter seriously.

This notice indicates that the IRS is aware that you may not have reported your #crypto income.

https://t.co/M1WXfSOlag

[CryptoTaxAudit @CryptoTaxAudit]

No case is too complex for us. Bring it on!

Our analysts are experts in calculating complex #defi, #NFTs, and high-volume trading.

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[Clinton Donnelly @CryptoTaxFixer]

Suffered losses from Celsius? 📉 Report them on your taxes. Explore two ways to report on your return. Tax situation unique? Visit 👉https://t.co/jGwCa9nhaB for personalized strategies and peace of mind. https://t.co/avaXZ9ixCK

[CryptoTaxAudit @CryptoTaxAudit]

Every team member owns #crypto because we believe in walking the walk, not just talking the talk.
We've stood where you stand through the highs and lows, understanding every bit of the journey. We're more than a company; we're a community that truly gets our clients!
#WGMI #HODL

[CryptoTaxAudit @CryptoTaxAudit]

Tick-tock, the April 15th tax deadline is quickly approaching! 🕒

Wondering if you should hit the snooze button with an extension? You absolutely should!
Check out our latest blog

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[CryptoTaxAudit @CryptoTaxAudit]

Maybe it's time to hire a #crypto tax expert 🤔

Client: "I walked into my accountant's office with my crypto portfolio. He opened his calculator, paused, and said, 'Let's stick to numbers that exist, shall we?'

We are experts in complex #defi, #NFT, #staking, high volume trading.

[Clinton Donnelly @CryptoTaxFixer]

How much would you pay to get 25 years of your life back?

[Clinton Donnelly @CryptoTaxFixer]

🚨Senator Warren proposes an "anti-millionaire tax," potentially transforming the IRS into a financial panopticon, watching over all American wealth. Don't give up your freedom! #crypto #cryptocurrency #defi #nft #aml #kucoin #cryptonews https://t.co/mqmsZahyME

[Clinton Donnelly @CryptoTaxFixer]

The #IRS has really ratcheted up the game.

If you aren't filing your taxes, trust me, take advantage of this bull market to generate income for you to clean up the past.

Make money, pay taxes, MAKE MORE MONEY!

[Clinton Donnelly @CryptoTaxFixer]

My father always said, 'You're going to pay the IRS eventually, so you might as well do it now and save yourself the worry later.'

It's a truth that resonates deeply, reminding us that timely payments not only fulfill our obligations but also spare us from future penalties.

[Clinton Donnelly @CryptoTaxFixer]

I said this on @Crypto_TownHall last year.

"Anti-money-laundering is the Achilles’ heel of the crypto industry."

@cryptomanran @scottmelker #KuCoin #crypto #aml
https://t.co/GpsG1hOIlm

[Clinton Donnelly @CryptoTaxFixer]

Anti-money-laundering is the Achilles’ heel of the #crypto industry. AML took down @cz_binance.
#kucoin is now their focus.

Banks are already canceling crypto traders' bank accounts because of the cost of AML monitoring.

[Clinton Donnelly @CryptoTaxFixer]

In the latest episode, I had the pleasure of interviewing Chris Groshong, founder of @CoinStructive, who shared valuable insights on crypto scams and fraud recovery. 👍 Find it helpful? Smash LIKE, SHARE with friends & SUBSCRIBE for more! https://t.co/JcawuK3CTs

[Clinton Donnelly @CryptoTaxFixer]

@CryptoTaxAudit We have a repeatable, proven process that we can defend before the IRS and audits.

40% of the time, when clients come to us with audits, we get refunds because we do the gain calculation better than they did or the firm that they used otherwise.
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[Clinton Donnelly @CryptoTaxFixer]

If you're a medium to large trader or a high-frequency trader, I highly encourage you to call up my staff @CryptoTaxAudit to discuss the benefits of a full-service gain calculation.