FIFO is a contraction of the term “first in, first out,” and means the first coins you purchased are the first coins you sold. FIFO is the most conservative way to calculate capital gains, and also the easiest. Here is how you can calculate your capital gains by hand using the FIFO method. First, download […]
Donating Cryptocurrencies as a Tax Strategy
Selling cryptocurrencies can trigger capital gains taxes which, depending on your tax bracket and whether your gains are short term or long term, can result in a significant amount due to the IRS. One way around this is to donate coins to your favorite charity. Let’s say you were lucky enough to buy 1 bitcoin […]
Taxation of CryptoKitties
A popular new game has emerged online based on the Ethereum platform: CryptoKitties. Players can buy and sell virtual cats which they can breed and create new unique virtual cats in return. Virtual cats may sound like a joke, but the business surrounding this new craze is no laughing matter: according to CNBC, players have […]
How to Deduct Bitcoin Mining Costs
Clients who mine cryptocurrencies often ask me what they are able to write off. The short answer is it depends if their activity is classified as a hobby or a business. Either way you can write off expenses, but as noted below, the amount you can write off varies depending on how the IRS classifies […]
Theft and Loss of Cryptocurrencies
Recently a client of mine, who I will call John for privacy sake, painted himself into a corner and lost access to his cryptocurrency account which contained thousands of dollars in alt coins. He generated a code to encrypt his wallet and saved the code to Amazon Drive. Unfortunately, John’s Amazon drive synced over his […]
