Digitax

Calculating Capital Gains

  • Since the IRS has classified cryptocurrency as an individual's property, it falls under the same tax laws as a sale any other kind of property.
  • For example, say you traded Bitcoin with US Dollars between Jan 1 2019 and Dec 31 2019.
  • You bought 1 BTC for $10,000.
  • You sold 1 BTC for $12,000.
  • You made a short term capital gain of $2,000, and therefore the gain will be taxed as ordinary income.
  • Note: Trading one cryptocurrency for another (for example, BTC for ETH) is a taxable transactions in US Dollars. This requires one to know the US Dollar price of each cryptocurrency at the time of the trade.

Digitax makes this easy.

Sample Bitcoin Trades
Acquired TimeDisposed TimeTermCurrencyQuantityCost Basis ($)Proceeds ($)Gain (Loss) ($)

Crypto Tax Forms

  • The IRS is cracking down.
    At the top of the 2020 US tax return, you need to specify whether or not you traded cryptocurrency during the 2020 tax year. If you did, almost certainly the IRS Form 8949 will be required.
  • Use TurboTax to file? We've got you covered and will create the TurboTax friendly 8949 for you.
  • The forms below could be required as addendums to your US Tax return. Digitax will take away the hassle and produce them for you.

IRS Form 8949

  • Report of gains and losses of capital assets

  • Demonstrates cost basis of purchases and proceeds from sales

FBAR

  • Report of Certain Foreign Financial Accounts

  • Required if holding $10,000 worth of crypto in wallet or exchange outside of US at any point during the year

IRS Form 8949

  • Report of gains and losses of capital assets

  • Demonstrates cost basis of purchases and proceeds from sales

FBAR

  • Report of Certain Foreign Financial Accounts

  • Required if holding $10,000 worth of crypto in wallet or exchange outside of US at any point during the year

How it works

Upload

Upload your transaction data with your exchange's API, CSVs, or manually. This is the essential buy, sell, deposit, withdrawal, mining, and interest income that is used in your taxes.

Calculate

Digitax will then attempt to calculate your gains and losses from your transactions. Our algorithm is designed for investors of all kinds, and is frequently updated as the applicable tax code grows alongside the cryptocurrency space.

Reconcile

Though most users will be able to skip this step, we may need to you to help us reconcile some of your transactions. If necessary, this will help us get the clearest picture into your cryptocurrency income. This is largely because exchanges are inconsistent in the way they report transactions.

Download

Once reconciled, we'll calculate your taxes again and create your tax forms. The most common form is the 8949 which is attached as an addendum to your return. We also support TurboTax and FBARs.

How it works

Upload

Upload your transaction data with your exchange's API, CSVs, or manually. This is the essential buy, sell, deposit, withdrawal, mining, and interest income that is used in your taxes.

Calculate

Digitax will then attempt to calculate your gains and losses from your transactions. Our algorithm is designed for investors of all kinds, and is frequently updated as the applicable tax code grows alongside the cryptocurrency space.

Reconcile

Though most users will be able to skip this step, we may need to you to help us reconcile some of your transactions. If necessary, this will help us get the clearest picture into your cryptocurrency income. This is largely because exchanges are inconsistent in the way they report transactions.

Download

Once reconciled, we'll calculate your taxes again and create your tax forms. The most common form is the 8949 which is attached as an addendum to your return. We also support TurboTax and FBARs.

Calculate your cryptocurrency taxes today

Created by a CPA to save CPA fees.