Crypto tax experts Dennis Wohlfarth of Accointing.com and Clinton Donnelly, of CryptoTaxAudit.com address all the questions that American taxpayers have regarding crypto taxes during an “Ask Me Anything” on YouTube live.
Scroll to watch Crypto Tax Experts Video: LIVE: US Bitcoin & Crypto Taxes AMA with Dennis Wohlfarth & Clinton Donnelly (EA)
Two top crypto tax experts come together to talk about Crypto taxes in the U.S. In the full YouTube Live, we chat about:
Crypto Tax Experts Talk About: Overview of Crypto Taxes in the U.S.
- How are crypto’s taxed in the U.S.?
- How are crypto taxes calculated and are they taxed as income or as capital gains?
- Should crypto assets be treated in the same manner that currencies vs. equities are treated from a capital gains perspective?
- Is crypto-to-crypto trading considered a taxable event in the same way crypto-to-fiat is?
- How are airdrops taxed?
- What are forms like 1040, 1099-K and 1099-MISC forms all about?
- What is the likelihood of an audit if you use Coinbase? Do you need to tick the box on your 1040 return?
- What are some deadlines I need to look out for?
Crypto Tax Experts Talk About: Staking
- How is crypto staking taxed?
- How is the staked holding-period taxed (ETH2, ADA, XTZ)?
- Are staking/mining rewards double-taxed?
- When is staking Income considered to be earned income?
- What tax character does staking or minting income take?
- How to calculate crypto mining and staking taxes?
- If you swap a token on a 1:1 basis e.g. ETH -> staked ETH does that transaction count as a taxable event, resetting the year on capital gains?
Crypto Tax Experts Talk About: Derivatives and Margin Trading
- How are derivatives taxed in the U.S.?
- What are some complications of taxing derivatives in the U.S.?
- Does the type of derivative have tax implications?
- How is margin trading taxed?
- Is there a difference in how margin fees are taxed?
- How do I calculate my taxes due from margin trading?
Crypto Tax Experts Talk About: DeFi, Lending, Liquidity Pools
- Can you give us an overview of DeFi, Lending and Liquidity Pool Taxation?
- Is DeFi considered to be an income tax or a capital gains tax?
- Can I be taxed for lending and contributing to liquidity pools?
- How are Defi token swaps calculated? Are they the same as crypto-to-crypto?
- How are Defi airdrops taxed, are they different from other DeFi airdrops?
- How do I report DeFi income in my tax report?
Find out more about why these two top crypto tax experts came together for their crypto tax clients.
Why Did Crypto Tax Expert, Dennis Wohlfarth, Build The Accointing Platform And Why Partner With CryptoTaxAudit?
Crypto Tax Expert, Dennis Wohlfarth of Accointing.com:
We built Accointing.com because we needed to track all the investments we made over the past years. We started in crypto in 2014 and went through the ICO bubble and all the different movements until now.
At the end of 2017 or the beginning of 2018, we decided to build a tool to track the different trades of the different investments we did. And that's started to become bigger and bigger because we had friends that also needed the tool.
We built different solutions for different countries because the co-founding team is from different countries. And the team needed a specific solution for each country's different regulations and calculation methods.
Soon we needed a bigger team and hired a few of our first developers. We built up the team, and it snowballed. We then built Accointing as a platform.
I share my screen in the live AMA video to show how the platform looks.
When you first sign up with Accointing, you will find an empty dashboard to connect your different wallets and exchanges.
From there, you can choose whatever you want to connect. If you have a Coinbase wallet, search for Coinbase, click on a live connection, and connect it automatically.
Accointing only has read access, so there's never a need to worry about security issues.
We read the historical traits, import everything automatically to Accointing, and update it on the go.
Each time you log in or click on a hard refresh, we will input the newest data and collect all the different trades you did since the last time you logged in.
It's the same thing with Ethereum or the different hardware wallets.
You can connect the Bitcoin addresses that you have to Ethereum, DeFi trades, etc. Just import with the wallet address, and we import it automatically.
Once you have done that, you will find an overview of the different wallets and exchanges you own. You can connect the same account to your mobile phone.
We have a mobile app fully functional to keep track of and update everything. You can even connect wallets and more exchanges through the mobile app on the go or add manual transactions if you want to.
You will then find an overview of your total account value, the different assets you hold with an average buy price, profit loss, historical performance, different portfolio locations, and where you hold your coins.
You will also find a nice feature for the US we will dive deeper into where you can optimize based on the holding period. You can then report everything and create the tax reports and all these different outputs.
The cool thing about Accointing is that we decided to have the entire platform for free. So you can just import your transactions. You can keep track of everything. You can use the mobile app, and you only pay once you need a tax report.
We decided to do that because we wanted everyone to keep track of everything during the entire year. If you do that afterward and trade for a few years and then realize you need to do your tax report, it's going to be a mess because you did so much activity, had so many wallets, different exchanges, and maybe your exchanges went down.
You always want to keep track of everything. When you want to report, you have everything in one click at the end of the tax year. That's why we partnered up with Clinton Donnelly of CryptoTaxAudit.com because he is an expert in crypto taxation for the US.
We needed a local partner in the US to help us with the different classification methods, the different tax regulations, and the new regulations. With that, I want to give the floor over to Clinton Donnelly to talk about his service a bit and why he partnered up.
Why Was Cryptotaxaudit.com Founded By Crypto Tax Expert, Clinton Donnelly? And Why Partner With Accointing?
Crypto Tax Expert, Clinton Donnelly, CryptoTaxAudit.com & DonnellyTaxLaw.com:
I enjoy working with Accointing.com. We have a great partnership, and I think it is an excellent product.
I've worked with many of the platforms out there. There are several very good ones, but I consider Accointing to be at the top.
My team has been doing crypto tax returns since 2018; we've done thousands of them.
At this point, we are the number one specialty firm, taking care of defending cryptocurrency traders that the IRS is auditing.
I have 17 clients being audited on their crypto returns right now. This has given us a fascinating perspective because I can see how the IRS attacks cryptocurrency returns.
As a result, we've improved and changed how we prepare a crypto tax return. We call this our Bulletproof Tax Return Methodology. The idea is that we can prepare a return that is less likely for the IRS to attack.
Most of my clients are large traders and whales, and we have a real passion for everyone involved in cryptocurrency trading.
Crypto traders need tools because there's so little guidance. We put together CryptoTaxAudit.com with some fantastic products that you can't get anywhere else.
The first one is we have a newly announced DIY masterclass that you can take, which shows you how to do your Bulletproof Tax Return.
This return methodology can significantly reduce your chances of being audited and give you a better tax return than you would get with TurboTax, Taxact, H&R Block, or even your friendly local accountant's office.
We also have a revolutionary new service that no one else is offering.
We're using breakthrough technology to check your IRS returns weekly.
Furthermore, we can see when the IRS supercomputers have flagged your returns for an audit. If they put this flag on there, we notify our membership clients right away.
Typically, there are six months between when a flag is set in and when an IRS auditor starts the audit.
That's enough time for us to look at your return to figure out what's wrong. We can fix it, refile it, and you can avoid the 20 to 40% accuracy penalty plus significant interest that the auditor would hit you with.
This is revolutionary.
Finally, people have a tool that puts them in defensive positions, like having early radar.
In times of warfare, you want radar. You want to know when the enemy is coming in. Otherwise, you are waiting for the IRS to blindside you via mail.
So, this is fantastic stuff.
We're excited about bringing tools and technology to help the average trader in the United States. And we chose to work with Accointing because they can help generate a quality tax return with accurate results that work together with all of this new technology.
Become a member of CryptoTaxAudit today.
Crypto Tax Experts Video: LIVE: US Bitcoin & Crypto Taxes AMA with Dennis Wohlfarth & Clinton Donnelly (EA)