Episode Highlights:
- 00:08 – Crypto Taxes
- 02:35 – Coinbase Now Charge Tax To Transfer Bitcoin
- 03:25 – How To Get Cost Report For Taxes On Coinbase
- 05:40 – Coin Tracking Platform
- 06:43 – Demo Of Coin Tracking
- 08:38 – Trade Statistic From Coin Tracking
- 09:06 – Bitcoin.Tax
- 10:50 – Crypto Tax Prep
- 14:03 – Cryptocurrency Gains
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Transcription:
Hey guys, what’s up guys? It’s Dan again from cryptoCamacho.com where each day I help you navigate through this crazy Cryptocurrency Revolution.
00:08 – CRYPTO TAXES
Guys today I want to talk about one of the most exciting topics in Cryptocurrency today! Can you guess what it is? I’m telling you guys, this is…I’m going to leave you on the edge of your seat, this is one of the biggest topics ever, ever you’re not going to forget this guy’s. What I want to talk about today, it’s the big the one and only. I want to talk about taxes guys. I get a lot of questions and comments through email, through YouTube comments, and elsewhere a lot of questions about taxes and Cryptocurrency. How much do I have to pay taxes on my Bitcoin when I buy Ethereum do I have to pay taxes on it? Every time I make a transaction do I need to pay taxes on it? How much is the tax rate for my Cryptocurrency purchases? If they’re long term versus short term, if I buy Cryptocurrency, but I don’t sell Cryptocurrency do I still need to pay taxes on it? Is it taxes capital gains tax like other investments, like stocks and bonds that are short-term? All of these questions I get all the time about taxes, and cryptocurrencies. I am not an accountant, I’m not a CPA, I am not you know certified in any sense of the word to be a financial adviser, but I do want to touch on the topic today. I don’t want to spend a whole lot of time on it, but I did want to make a quick video and show you a couple of resources that you can utilize to do your taxes when tax time comes for the Bitcoin, Ethereum other Cryptocurrency purchases. I want you to be ready, because if you’re not ready you are going to get a very hefty tax bill from the taxman, from the IRS at least if you’re in the United States, and you’re not going to be too happy about it right. So, before I begin with the references and as you know the tools that I would recommend using to do your taxes for Cryptocurrency, I would highly, highly recommend you first take a look at buying privacy coins; Monero, Verge, Zcash, dash, deep onion, the list goes on and on and on. There’s a number of privacy coins that are now popping up all over the place, that will hopefully in the future help you pay less and less taxes on your Cryptocurrency purchases, on your Cryptocurrency transactions, and transfers. Now that Coinbase is coming out and signing with the IRS, even when you go I mean here’s Coinbase right here. When you go to Coinbase…I don’t have a whole lot in my account in Coinbase at the moment, but I am happy to report that I got my limit increased to $250,000, now I could buy a lot more Cryptocurrency if I want.
02:35 – COINBASE NOW CHARGE TAX TO TRANSFER BITCOIN
But what I wanted to show you is that, if you go and you make a…you send Bitcoin somewhere right, and again I don’t have a whole lot in here, but I’m going to go ahead and just say I want to send $50. I don’t know if they still do this, but let’s check oh I don’t have an address well, basically what I wanted to show you is that, they ask you now on Coinbase, they ask you know where are you sending your Bitcoin? Is it going to an exchange or somewhere else, and they’re doing that for tax reasons right. They’re doing that because they want to keep track of where your Bitcoin is, where it’s going and so forth. So if you don’t want that to happen don’t use Coinbase; which is why I partly stopped using Coinbase for the most part, but you know I still use Coinbase but not as much as I used to. But if you want to avoid that and go somewhere else and buy your Bitcoin right Robin Hood’s coming out with a fantastic app. So anyway that’s what I want to talk about.
03:25 – HOW TO GET COST REPORT FOR TAXES ON COINBASE
So, the first place I would go you know to learn about your taxes is actually Coinbase offers, if you’ve been using Coinbase, you’ve been transacting on Coinbase quite a bit, you can actually run a report. If you go to tools you go to reports, you can run a tax report to get the cost basis of all of your Cryptocurrency purchases. So, you go in to report right here, you go to the drop-down menu to type, the select cost basis for taxes it’s embedded so, they’re likely going to be adding to this. Then you need to select your account you know what account you want to get your cost basis for, I wish they would combine that which they probably will in the future thing, or you may be able to do it in advanced here and then you could run a report for all histories. So, all of my purchases for let’s just say Bitcoin you know over for all history right, and then you create the report it generates a nice little report right here for you. And I’ve already done it before I actually started making this video and here’s what that report looks like right. Okay so, here’s your cost basis report for taxes from Coinbase right. So, my account right here is…let’s see my account right here shows that in 2017 I purchased $55,000 worth of Bitcoin, in 2018 I’ve purchased $106,000 worth of Bitcoin only guys. If I were to run a report for Bitcoin cash or for Ethereum, or Litecoin these numbers would all be different, but for Bitcoin alone here’s my total bat I’m sorry here’s my total sells and here’s my total buys for Cryptocurrency right. So, these are only buys and sells through Coinbase right, this is not account for buys and sells through other exchanges, other platforms so forth and so on, and I typically move my coins out of coin base and into some other exchange so, that I could lower my fees when transacting and pushing back to my bank account so, take that for what it’s worth guys, but this gives you a nice report you know when it comes tax time to get your cost basis. So, okay another thing here let’s see, okay so, now there are a few other platforms, and I’m going to quickly go over and talk about for a minute.
05:40 – COIN TRACKING PLATFORM
One that I found and I’ve been exploring a bit it’s called coin tracking, cointracking.info. Been around for quite some time, been around since 2013, they have over 200 almost 300,000 users on this platform. If you look at their dashboards and everything, it looks very, very nice, what they can do. The price point looks reasonable as well, I’m not going to go through all of it, but I do want to show you a demo of this platform really quickly, because it’ll show you your personal profit and loss and will monitor all your Cryptocurrency transactions so, that when it comes tax time everything is all in one place for you right and it’s easy to calculate easy to understand what your taxes will be for your Cryptocurrency purchases. They’re supported by all of the different exchanges out there right; here are all the exchanges that you can pull your transactions into this platform on. So, obviously there are quite a few lots of reviews let’s jump right into the demo because I don’t want to spend a whole lot of time on just reading through the website you can do that yourself, but let’s look let’s look at a demo here really quick.
06:43 – DEMO OF COIN TRACKING
So, here’s a sample report and you could go through, and it calculates all the tax year, the total gains, total taxes so forth and so on. But if you jump into an actual demo which I have over here, you’ll see that you get a dashboard right, and on that dashboard it’ll give you the total value of all the coins you hold, or you’ve bought and sold, it’ll give you the number of trades you’ve made per month which is actually pretty interesting. It’ll give you the price of Bitcoin in the last 30 days, it’ll give you the number that the exchanges that you’ve been trading on in the last period of time. It’ll give you all kinds of information. So, not only is this good for taxes, but it’s also good for just kind of personal finance as it relates to Cryptocurrency to help you know create a portfolio that works for you right. This is a really great way to create a portfolio as well aside from taxes right. It’ll give you your balances by day. I’m actually not signed up to this platform yet so, definitely disclaimer there I haven’t signed up yet. I’m just doing a quick review on it; because I’ve been looking into it wanted to give you guy’s insight into it as well. I may sign up, if I do sign up to it I’ll let you know and I’ll show you kind of what that looks like, but right now I’m just exploring. So, I would like you guys to do the same, if you’re interested right. It’ll give you current balances for all your cryptocurrencies in your portfolio right. So, you easily will know how much you’re at across all the exchanges. I kind of do this already in Coinigy so, you know that’s kind of a bonus, but not necessary for me personally um, again balances for the exchanges it’ll give you timelines of what you’ve done your activity in Cryptocurrency across all the exchanges so forth and so on. And then it’ll really just give you your taxes as that the report I just showed you. Let’s go tax report, it’ll give you your tax report and it’ll give you your trade statistics. There’s a lot of information here guys, let me just go here real quick just to show you what I’m talking about.
08:38 – TRADE STATISTIC FROM COIN TRACKING
So, trade statistics it’ll give you kind of you know where you’ve been buying and selling your values, your amount of each Cryptocurrency, it gives you all kinds of stuff right, but most importantly at the end of the year it will give you your tax information, your purchases, your sales, your donations, your gifts, your transfers, your fees, your you know all the information you need. It’ll give you right here at your fingertips. So, that’s the first one cointracking.info I’ll put these links in the show notes so, you have them.
09:06 – BITCOIN.TAX
The next one I want to show you is Bitcoin.tax. I haven’t really used this one either, looks intriguing, looks like it’s gaining some popularity. You can import your transactions from Coinbase, or other exchanges to calculate your gains or losses on your income and you can actually file your tax return directly from this interface right here as well. So, it’ll give you a complete rundown in the history of everything. And so, here’s a history…I’m sorry here’s a…the screenshot doesn’t get bigger, but I’ll show you here in a second here. So, features I mean you could go through this yourself, but you could import data from a variety of exchanges, you could import mining income, you can import or calculate your capital gains, or capital gains losses, you can do this year over year, supports major currencies, supports major cryptocurrencies including altcoins. And if you go over to…whoops you go to calculate Bitcoin taxes, and you have to be signed in for this. You can go and actually see oh there is a fee to sign up here, but taxes give me one sec here. Okay so, here we go, I haven’t again imported anything in here so, I can’t really show you active data, but I wanted to just show you the interface, to show you what it’s like. You could pull in again all of your exchanges, import the trades you’ve made from these exchanges, add any fees that may be associated, you can add any income that you’ve made, you’re spending and then it’ll calculate ultimately. It’ll calculate your capital gains, taxes, over the year for the tax year right. And then it’ll print them out in nice reports for you right here. There is again a small price point for this, but again I’m just trying to introduce you to this you guys could see it.
10:50 – CRYPTO TAX PREP
The last one I want to show you is called crypto tax prep. It comes from a company called happy Tax Service. Cryptotaxprep.com is their website, this is more of a hand-holding or more of like an agency kind of like an H&R; block for Cryptocurrency taxes. You can give them a call if you want to talk to somebody live. You can go ahead and sign up and schedule some time with a consultant, but they have a lot of different options here and this is more of you know if you want to talk to somebody like an accountant you can go here and talk to somebody which a lot of people may want. They have large transactions, a lot of transactions they want to make sure they’re completely in compliant with the IRS. You can go here and you could talk to a consultant right. And so, this is definitely much more of a hand-holding experience more of like a financial adviser and the price actually reflects that right. The price on this one is a bit higher on coin tracking and so forth. The price is like you know thirty bucks. It is cheap. Same with Bitcoin tax is fairly cheap. With this one it’s a bit more expensive, because the service the level of service is so much higher. So, you’re going to pay $750 for the base package, $1250 for the premier package, but it will cover everything you want. Every question you have every confusing tax rule or tax code you have a question about, they’ll help you answer that right. They’ll keep this all kind of within the plan. Two different plans they offer and I think that you know…oh I’m sorry they offer three plans. The Platinum package as well $3,500 and this is for kind of high end users. Everything is included from the previous plans, but it includes other features and benefits as well. So, if you want that plan you can join for that. I’d recommend this one for you high frequency Cryptocurrency traders that have trades over you know a certain amount for the year, over ten thousand at least your gains are probably going to be pretty sufficient to cover the costs the base or the premier package, but I think this is really again for somebody that really wants hand-holding, wants to talk to a financial adviser slash accountant, and wants to be comfortable with really submitting their taxes to the IRS, and a legitimate in a professional way. These are the guys you want to go to. So, again I just wanted to show you these resources; a lot of people ask me about taxes. The three again the three options are coin tracking, that’s cointrackinginfo.com, it’s also Bitcoin tax, and it’s also crypto tax prep. And you could also run a cost basis report on Coinbase as well. Okay guys, I’m Dan from cryptocamacho.com I hope this was helpful for you guys? I’m curious how you guys are doing your Cryptocurrency taxes this year tax time is coming up. It’s already February in the United States, we have to file taxes by April, April 15th I think is the date. So, we have a little bit of time, but it’s coming up quickly. So, I wanted to give a shout out to these Cryptocurrency tax providers to help you do your taxes. Guys don’t avoid paying taxes to the IRS. You will get burned I know Cryptocurrency, there’s a lot of people talking about don’t pay taxes, don’t pay taxes, hide your taxes, you know on Bitcoin. I don’t know if you do that guys; you’re going to get nailed by the IRS. They’re going to come and want their money, but there is one loophole that I want to show you guys real quick that you may be able to Cryptocurrency cap…
14:03 – CRYPTOCURRENCY GAINS
Cryptocurrency gains gambling, there might be a loophole guys for your taxes. If you can classify…see looking right here Bitcoin tax. Bitcoin tax loophole could save Cryptocurrency investors millions as it leaves HMRC short. And what this article is really talking about is taking an advantage of a loophole that the tax code permits, and that’s to declare your Cryptocurrency holdings as gambling, as gambling holdings. So, what is this as gambling holdings? So, that your tax rate will be much, much less on your Cryptocurrency right, because if you declare it as gambling income, it’s a lot less than it is with capital gains taxes which is what stocks you know which is what stocks typically have. Okay so, millions of pounds could be lost by the Treasury after a tax loophole was revealed and Cryptocurrency investors are expected to take full advantage of the gap right. And this kind of goes through this loophole, we don’t normally tax betting and gambling, because it is usually not classified as trading income. So, you may want to look into that talk to your accountant, talk to your financial adviser, or CPA about this. But I want to make you aware that you may be able to declare your Cryptocurrency gains as gambling gains which don’t need to be declared as capital gains. So, just keep that in the back your mind as you’re going through all of these tax implications and tax workshops, as you do your taxes. Again I’m Dan from cryptocamacho.com hopefully you enjoyed this video? Let me know what you’re doing with your taxes, and do your taxes guys, you don’t want to get screwed by the IRS. Let me know what platform you like the best, let me know what platform you choose. Would love to know which one works the best thanks.
