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Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

cryptotrader.tax

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Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#21

Post by seibelj »

jniedrauer wrote: post #18
seibelj wrote: post #10

Earlier quoted context omitted.

Yes, it is quite easy to pay taxes on crypto and quite difficult to explain during audit how cash ended up in your bank account without associated tax payments. Pay your taxes!

> Yes, it is quite easy to pay taxes on crypto I only ever played with small amounts for fun, and in the long term, I took losses. But it's very difficult for me to compile all my trades for tax reasons. I set up automated trading on half a dozen different exchanges (some of which no longer exist) using half-baked python scripts with no logs. How on earth do I compile a Form 8453 showing all of those thousands of tra…

I'm sorry you decided to conduct algorithmic trading of digital assets on multiple exchanges without ever considering taxes. But services such as those linked by the OP (and others like bitcoin.tax) automatically import trades from all major exchanges and calculate the most advantageous method to minimize taxes.

Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#22

Post by xur17 »

jniedrauer wrote: post #18
seibelj wrote: post #10

Earlier quoted context omitted.

Yes, it is quite easy to pay taxes on crypto and quite difficult to explain during audit how cash ended up in your bank account without associated tax payments. Pay your taxes!

> Yes, it is quite easy to pay taxes on crypto I only ever played with small amounts for fun, and in the long term, I took losses. But it's very difficult for me to compile all my trades for tax reasons. I set up automated trading on half a dozen different exchanges (some of which no longer exist) using half-baked python scripts with no logs. How on earth do I compile a Form 8453 showing all of those thousands of tra…

I agree with this. Normal trading on exchanges might be relatively easy since you can just export transactions and dump them into a tool like this, but it can get a lot more complicated than that.

Some examples of things that are complicated:

- Trading ERC721 tokens (there are no tools to track down these transactions, track cost basis, etc - I ended up spending days hand crafting scripts to retrieve this data)

- Opening a cdp on something like Makerdao (which parts of this are taxable events / how do I file it?)

- What counts as a wash sale? [0]

- What are allowable methods of tracking cost basis?

- How do I handle hard forks?

Some of these are partially answered, but none of it is clear at all.

[0] https://help.cointracker.io/taxes/us-taxes/do-wash-sales-app...

Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#24

Post by jniedrauer »

ceejayoz wrote: post #19
jniedrauer wrote: post #18

Earlier quoted context omitted.

> Yes, it is quite easy to pay taxes on crypto I only ever played with small amounts for fun, and in the long term, I took losses. But it's very difficult for me to compile all my trades for tax reasons. I set up automated trading on half a dozen different exchanges (some of which no longer exist) using half-baked python scripts with no logs. How on earth do I compile a Form 8453 showing all of those thousands of tra…

> How on earth do I compile a Form 8453 showing all of those thousands of trades? By planning to do so from the beginning. "I forgot to keep records" isn't going to be something the IRS really cares to hear.

Yes, hindsight is 20/20. In my case, I doubt they'll care, given the small amount and the fact that there were no taxable profits. But I have to imagine that I'm not the only one who did this.

Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#25

Post by bonestamp2 »

sanbor wrote: post #12

Is there any rule of thumb to calculate taxes over crypto? Like "10% of your profits". I'm sure if you make more than 500k a year you might have to pay more taxes but I'm sure there is an average that covers 90% of traders.

> 10% of your profits

Calculating your profits (and loses) is what these sites generally do -- that is usually the hard part, especially if you have a lot of transactions. Not to mention, the way that you calculate that differs by jurisdiction. Loses are just as important since they can have a significant benefit to the taxes you owe. I use bitcoin.tax and then export the data for my accountant to fit into the rest of my tax return.

Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#27

Post by jallmann »

nodesocket wrote: post #3

Looks great. Any support for Robinhood crypto trades coming?

For Robinhood crypto, there's form8949.com which is generally fantastic. It can import from a number of crypto exchanges in addition to the traditional brokers.

Re: Show HN: CryptoTrader.Tax – Tax calculator for your crypto trading

#29

Post by fpgaminer »

sanbor wrote: post #12

Is there any rule of thumb to calculate taxes over crypto? Like "10% of your profits". I'm sure if you make more than 500k a year you might have to pay more taxes but I'm sure there is an average that covers 90% of traders.

If you need a rule of thumb, for example you want to have a rough idea what your taxes would be like to see if you're comfortable doing some liquidation or something, then sure. I'd back-of-the-napkin long-term gains at 20%, and short-term at 35% (covers both federal and state; assumes U.S.).*

Again, very rough. You need concrete numbers once you do actual trading, because in the U.S. you are required to make estimated tax payments. The actual numbers can, for example, vary wildly from nearly 0% to upwards of 50%.

* These are based on a typical 15% federal tax on long-term gains and 5% for state taxes; or 35% being a comfortable average for most people's effective tax rate in the U.S. for short term gains. The 50% tax rate is approached when you have largish gains, toward $1 mil or so, and live in expensive states like New York or California.

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