Complexities in Cryptocurrency Tax Calculation

Cryptocurrency like Bitcoin is traded on thousands of exchanges across the world — to be exact 16002 as of today as per Coinmarketcap.com. So complexity here is,

- Its price changes every second.

- It’s different on every exchange.

- It is traded 24x7x365 days a year — Market never sleeps, unlike stocks!

- Imagine not just Bitcoin, there are 1500+ of those!

- Trading one crypto to another is taxable — how do you calculate gains in Fiat(normal) currency like USD? Can do for one, what if you’ve converted Bitcoin to Ripple & used it to buy Litecoin, withdrew from an exchange for safety & deposited it back to buy Ethereum, used it to buy some tokens in an ICO (an IPO equivalent here).

- Which of those actions are taxable and which are not?

- How do you keep track of prices every second if you are a day trader?

- When you look at your trades at the end of the year, how do you reconcile everything?

I am associated with BearTax where we handled these complexities via our platform and can help you get this done in minutes