Tax Reports

Tax Reports

The Bittax reporting system designed to make report filing quick and easy.

Our reports match the schedule D of the IRS 8949 form. you just need to copy and paste your data from our report to the appropriate place in the IRS form. Our reports are divided into long and short term, as requested by the IRS. 

Tax rate – Capital gain tax rates are unique to the individual and vary from person to person, therefore, we calculate your tax rate based on the data you provide.

SPECIFIC IDENTIFICATION vs FIFO vs SMART FIFO

.SPECIFIC IDENTIFICATION – This method identifies the exact Bitcoin (BTC) that you sold, and calculates your tax liability on the sale of the actual Bitcoin based on the blockchain evidence. To perform the calculation using the specific identification method, one must identify — using evidence from the blockchain — the purchase dates and sales dates of all Bitcoin movements into and out of wallets for the same tax year. Once identified, purchase and sale dates and prices of the same Bitcoin must be matched using blockchain data. Once these steps are complete, one can calculate the tax liability. In cases where specific identification is not possible, we employ smart FIFO instead.  

FIFO – The First-In-First-Out method does not take real-time user activity into consideration. To calculate using the FIFO method, first  make a list of all purchases and another list of all sales and then perform the matching of transactions To match, take the first transaction on the purchase list and calculate the tax results as if it was sold at the price and on the date from the first sale in the sales list. Oftentimes, this will result in an over taxation, especially if the first Bitcoin was purchased in the early years.

SMART FIFO – This calculation is similar to FIFO, however, we calculate it according to the stock that is available at the exchange/personal wallet at the moment of the sale.

How to Read our Reports 

Run number = the index of a transaction in this specific report. 

(a) Description of property

Amount = the number of coins that were sold in a specific transaction. 

Assent = the type of cryptocurrency that was sold.   

(b) Date acquired = the date of the purchase transaction that we use as the cost basis of this coin.

(c) Date sold or disposed of = the date of the sale transaction. 

(d) Processed = the value of the coin sold in USD. 

(e) Cost or other bases = the value of the amount that was sold in USD at the time of purchase.  

(h) Gain or loss = Processed – Cost or other bases

Tax due Est = Gain or loss * the tax rate for this transaction.

IMPORTANT: IRS Circular 230 Disclosure

Any tax-related information contained in this Site, the Services, or any deliverables thereof, is not tax advice, and not intended or written to be used or be relied upon, and cannot be used or relied upon, by you or any taxpayer for the purpose of avoiding penalties imposed under the United States Internal Revenue Code or any other applicable law or for promoting, marketing, or recommending to another person any transaction or matter addressed herein or to provide tax advice or any tax-related matter. You should seek the advice of a tax professional regarding your particular circumstances notwithstanding the use of our Site, Services or any deliverables thereof.

Bittax makes no claims, promises, or warranties about the accuracy of the information provided herein. Tax advice cannot be provided on a general basis and must be specifically tailored for each individual by his or her representative. Everything included in this Site, the Services, or any deliverables thereof, is nothing more than our opinion and is not, and should not be relied upon as, a statement of fact.

DISCLAIMER:

YOU ACKNOWLEDGE AND AGREE THAT NOTHING IN THE SITE, THE SERVICES, OR ANY DELIVERABLES THEREOF, NOR ANY INFORMATION CONTAINED THEREIN, ARE INTENDED, OR SHOULD BE RELIED UPON, TO REPLACE INDIVIDUAL TAX ADVICE, TO MEET THE TAX AUTHORITIES POSITIONS OR REQUIREMENTS, TO GUARANTEE AN ACCURATE OR TRUE TAX OBLIGATION, TO BE APPROVED OR ACCEPTED BY THE TAX AUTHORITIES, OR IN ANY WAY TO OBLIGATE THE TAX AUTHORITIES.

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