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The cryptocurrency universe is still rather young, so some of the challenges can be chalked up to growing pains. However, cryptocurrency tax calculations are inherently more complicated than trading securities because cryptocurrency can be easily moved from one platform to another. When this occurs, the tax basis (how much you paid for a cryptocurrency) is lost in the transfer. Let’s illustrate this by assuming that Person A, who is a US citizen, bought Cryptocurrency B from Exchange C for a price of $100. Later, Person A sends Cryptocurrency B from Exchange C to Exchange D. Some time passes again, and Cryptocurrency B doubles in value. Finally, Person A sells Cryptocurrency B on Exchange D for $200. In this situation, Person A’s capital gains are his proceeds ($200) minus his cost basis ($100), which equals a $100 gain. Exchange C is unaware that Person A’s cryptocurrency has been sold and cannot provide Person A any documentation regarding capital gains, since the only thing they know is that Person A purchased some crypto (not a taxable event). Exchange D, on the other hand, knows that Person A made a sale of Cryptocurrency B, and in compliance with IRS regulations, provides a report showing your proceeds at $200. Since they do not know how much Person A paid for this currency (its cost basis), they assume a cost basis of $0. Now Person A has an official document (a 1099B) that is sent to the IRS stating that he has $200 of capital gains that are subject to taxes. Another possible outcome from this is that if Exchange D may not send any tax documentation at all. In either case, the burden is on Person A to provide complete information to the IRS, which will ensure compliance with tax regulations and that their tax liability is minimized. Gathering and reporting this information is the service I provide.

Most definitely! One of my favorite things to do is clean up the data that clients have on 3rd party calculator sites. My services in this area include: Converting data files from exchanges, wallets, and blockchains for easy importing into your selected tax calculator Performing data entry and confirming data integrity Identifying and adding missing data Fixing incorrect data Reconciling transactions and balances Adding historical coin pricing for unsupported assets (in most cases) Handling staking, liquidity mining, DeFi transactions, airdrops, forks, uncommon investment strategies, and more!

My custom-built software is tailored for the US and UK. However, I can support virtually any tax jurisdiction by leveraging the power of 3rd party software (such as Koinly, CoinTracker, etc.) at minimal additional cost.

There are a variety of alternative online crypto tax calculators that offer diverse features and levels of assistance. The biggest is probably CoinTracker, and Koinly is another good option for the price. These options mainly offer software that calculates your numbers and generates reports based on the data that you have to import yourself. This process is challenging for most people, especially people who deal with exchanges and wallets that have poor data export options. In my experience, these platforms are fine for simple data, but are ill-equipped to handle anything challenging like interacting with Smart Contracts, Decentralized Finance, and less reputable exchanges. These sites also have poor error handling in some cases, meaning that the numbers that they calculate for you can be off by a significant margin and not alert you that there is a problem. Usually this results in you paying way too much in taxes.

Absolutely! However, be prepared for the process to be challenging and time consuming. If you want to do it for yourself and would like help, I would be happy to guide you along the way and/or perform any step of the process for you. Contact me to discuss options.