“Make no mistake about it, cryptocurrency audits are on the rise. Don’t face a cryptocurrency audit alone.”
- Alyssa Maloof Whatley
Pro Tip:
Crypto is currency.
The United States’ official position on cryptocurrencies is a little different than that of other nations. Your crypto holdings are classified as property and currency and subject to capital gains taxes. The government sees every sale or exchange of property as a taxable event.
How Long Should I Keep My Cryptocurrency Records?
Although the IRS has been slow to ramp up enforcement and auditing of cryptocurrency transactions, auditing activity is on the rise. To protect yourself, you should plan to maintain your records indefinitely.
It’s smart to have all your cryptocurrency records translated into U.S. dollars.
A complete record will include:
Value
The basis value of your cryptocurrency when acquired
Transactions
Any instances where you used crypto to buy a product or service
Exchanges
Exchanged one type of crypto currency for another
Sales
Sold a product or service for cryptocurrency
Earnings
Earned crypto currency via airdrop, mining, staking, or lending
Pro Tip:
Keep thorough records.
Knowing that audit activity is increasing, being proactive about an audit is the best early defense strategy. By keeping accurate transaction records, you minimize your exposure to paying back taxes, penalties, and interest on the taxable value of your crypto holdings.
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“When I first spoke to Alyssa I was facing an IRS Audit for two years at the same time and felt extremely overwhelmed. Alyssa outlined a solid approach and was very easy to talk to and understand. My tax liabilities were brought down by 50%.”
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“The best time to prepare for a cryptocurrency audit was the day you purchased your first coin…but if you have gaps in your transaction history, now is the time to get professional assistance to make sure all your cryptocurrency activities have been properly disclosed for tax purposes. ”
- Alyssa Maloof Whatley
