All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: How to file taxes for Cryptocurrency.

Hello jayshi19,

 

Welcome to H&R Block Community.

 

According to the information you have provided, it sounds like you are using the H&R Block online tax program. In the section called "[Visit topic] 1099-S Sale of real estate, collectibles, and other investment property," for normal cryptocurrency sales, you can leave it as "No special type" in the [Type of disposition] box. When you have a situation where you invested money in an ICO and they ran away with the money, you claim the loss in this same section. Also, when you are reporting this type of loss in the section for "[Visit topic] 1099-S Sale of real estate, collectibles, and other investment property" in the online tax program, make sure to select "Worthless securities" in the [Type of disposition] box. Worthless securities means your investment became worthless and this applies to a situation where the money that was invested in an ICO was taken away and you never got it back.

 

Regards,

 

Lawrence

Tax Research Specialist

Pioneer
Posts: 2
Registered: ‎04-12-2018

Re: How to file taxes for Cryptocurrency.

So I've been reading through this thread, and found it to be very helpful. I used a website called TaxToken to generate a 8949 form from all my transactions during 2017. So am I allowed to just enter the totals as a group sale, or is there a way to import the .txf file that was generated into your desktop H&R Block program? (I don't want to manually enter several pages of transactions.)

Pioneer
Posts: 2
Registered: ‎04-12-2018

Re: How to file taxes for Cryptocurrency.

Actually, I think I answered my own question. I was able to import the file on the Welcome tab, and it looks like it put the numbers in the right places.

Pioneer
Posts: 2
Registered: ‎04-15-2018

Re: How to file taxes for Cryptocurrency.

In the "Sale proceeds minus sale expenses" section, that sounds like the place where I input my gains. So, if I have a gain, the Sale proceeds minus sale expenses section ought to be some positive number, possibly less than the cost basis, right? My problem is that when I input a number X in Sale proceeds minus sale expenses, the online program displays X-cost basis as my gains, even though I thought X itself was my gains. What should I put in Sale proceeds minus sale expenses?

 

Also, I have a csv file corresponding to a form 8949 statement, which I generated from Cointracking.info. How do I upload this form to the H&R Block website?

Highlighted
Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: How to file taxes for Cryptocurrency.

[ Edited ]

Hello MrLawrence,

 

For cryptocurrency reporting, the "sale proceeds minus sale expenses" box is to report the sale proceeds amount only. Do not enter the gain in that box. For cryptocurrency reporting in that section of the tax program, "sale proceeds minus sale expenses" box is to report only the sale proceeds amount. Then, on the later page to report cost basis, you enter the dollar amount in the "cost or other basis" box. The tax program will automatically calculate the gain for you without having you to enter it.

 

If you have a csv file for a Form 8949 statement where it shows a list of multiple transactions for these cryptocurrency sales, in the event you can't find the section to upload it, you can use the group sale method. In the same section where you saw the "sale proceeds minus sale expenses" box, you enter in the "Description" box that this a group sale, total up the sale proceeds amount for data entry on the sale proceeds screen, and then total up the cost basis amount for data entry on the cost basis screen. For the date acquired on a group sale, use the "Exception" box to select either "various - held long term" for any cryptocurrency purchases made before 2017 or "various - held short-term" for any cryptocurrencies purchases made during 2017. For the Sale Date on a group sale, you can to use date of the last cryptocurrency sale and use that for reporting the group sale. According to the tax rules, you can't group sale long-term and short-term cryptocurrency transactions together. Therefore, group sale entries for long-term and short-term transactions have to be reported separately.

 

Regards,

 

Lawrence
Tax Research Specialist

 

Member
Posts: 1
Registered: ‎04-16-2018

Re: How to file taxes for Cryptocurrency.

So I'm trying to create a form 8949 for my crypto sales, and the program is not letting me edit a new form manually because it will "override" what the program has done. 

 

It says this when I try to edit the form:

 

The program calculates this for you.  Would you like to override the value we calculate.  OVERRIDING THE VALUE WILL PREVENT E-FILING.

 

I do have stock transactions in earlier copies of a 8949 and I assume that is the problem.

 

 

Associate (Pioneer)
Posts: 253
Registered: ‎01-08-2018

Re: How to file taxes for Cryptocurrency.

Hello destrat,

 

Welcome to the H&R Block Community.

 

According to the information you've provided, it sounds like you are using the H&R Block desktop/downloadable software. The Form 8949 cannot be manually edited or filled out in the "Forms Central" menu.  In order to get the crypto sales shown on the Form 8949 in the tax software, under Federal, Income, you can go through the interview section for "Sales of Stocks, Bonds, Mutual Funds, and Other Securities (1099-B)" and fill it out there only if you have a Form 1099-B for these cryptocurrency sales or you can go into the interview section for "Sales of Collectibles and Other Investment Property" for any cryptocurrency sales that is not reported to you on a Form 1099-B.  The alternative is to go into the "Forms Central" menu, click [Federal] tab, select (Show Forms with Data), scroll down to find and double click to open "Capital Gains and Losses Worksheet." Once inside the "Capital Gains and Losses Worksheet," click [+ New Copy] button in order to create a new "Capital gains and losses worksheet" and enter the crypto information there.

 

Regards,

 

Lawrence
Tax Research Specialist