Posts RSS Comments RSS Digg Technorati Blinklist Furl reddit 105 Posts and 7 Comments till now
This wordpress theme is downloaded from wordpress themes website.

Cryptocurrency Mania (and taxes)

Jan 2016 to Mar 2017, I was making reliable progress on HeroQuest UE4. After changing jobs (and moving from TX to CA), progress slowed, and I entered an indefinite hobby project sabbatical circa late Jun 2017.

Early Nov 2017 I got sucked into the cryptocurrency mania – albeit a bit late to the party.  Circa May 2013 (Tekzilla 431) I have vague memories of almost buying (and/or mining) bitcoin, but for whatever reason I dropped it.  I suspect it’s a common story.  Price quotes: $266 (Apr 2013), $130 (May 2013), $100 (Jun 2013), $350-$1242 (Nov 2013), $600-$1000 (Dec 2013), $6,500 (Nov 2017), $10,000-$20,000 (Dec 2017), $7,000 (Mar 2018).

Back to Nov 2017…  Besides learning about it, I also invested a small amount (for fun), which caused me to get sucked into the overly complicated tax situation. It’s an example of how governments too often add unnecessary complexity to our lives.  This is bad because it wastes human effort, adds counterproductive complexity to our lives, discourages innovation, rationalizes witch hunts (selective enforcement), and worst of all – it contributed to extending my HeroQuest UE4 sabbatical :-p

I’m not a licensed CPA or tax professional, but here’s my layman’s summarized understanding.  The IRS considers cryptocurrency as property (for tax purposes), so you’re expected to track every time you get it as income (includes mining), you spend it, or you trade it.  If you day trade and/or mine and/or use it for daily transactions, then you could end up with an absurd of transactions.  And you might lack detailed records of everything.

Standard tax software (eg TurboTax, TaxACT, H&R Block) doesn’t have an easy/streamlined way to import data for crypto taxes.  Specialized crypto tax software (eg, supports some exchanges via API import or CSV/XLSX import.

But for other exchanges, I ended up writing Python scripts to help process the data.  Eg copy tables of data from an exchange website to use as input file to a Python script, which outputs a CSV file that can be imported into a crypto tax reporting tool. The crypto tax reporting tool can then be used to generate a Form 8949, a PDF, a CSV/XLSX, or a tax report file that can be imported into traditional tax software (eg TurboTax, TaxACT).

The intent of this blog is to track some of my programming hobby projects. Cryptocurrency investing (and tax reporting) is arguably one of those hobby projects in that…  I did some learning about cryptocurrency (related to computer software and hardware).  I wrote some Python scripts to help with investment tracking and tax reporting. And it’s industry news (my day job is GPU software; crypto mining uses ASICs and GPUs).  So it’s sort of relevant.  However, besides this one entry, I don’t plan to post about cryptocurrency.

BitcoinEthereumRippleLitecoinNEOCardanoStellarDashMoneroVeChainNanoDogecoinDragonchainSALTSteemBinance CoinZcashIOTATHEKEY

Trackback this post | Feed on Comments to this post

Leave a Reply