6 things you need to know about crypto taxes; Interview with David Kemmerer, Co-Founder and CEO of CryptoTrader.
David Kemmerer is co-founder and CEO of CryptoTrader.Tax, one of the easiest and most reliable platforms to prepare your cryptocurrency taxes. David will tell us more about crypto taxes in this interview.
What is CryptoTrader.Tax?
CryptoTrader.Tax is a software platform that automates the tax reporting process for people who invest, buy, sell, trade or otherwise use cryptocurrencies. An easy way to think about it is like TurboTax for cryptocurrency.
How does CryptoTrader.Tax work and what are the most important functions of the platform?
CryptoTrader.Tax works by integrating with all major exchanges and cryptocurrency platforms. This allows users to log in and automatically get all of their historical transactions from any platform they use to buy, sell or trade cryptocurrencies. After all data has been imported into the software, the user can use his necessary tax returns with the push of a button.
What makes CryptoTrader.Tax so special and how can it help crypto traders to reduce their tax liability?
CryptoTrader.Tax is used by tens of thousands of crypto investors. It’s packed with helpful features that drastically set it apart from the competition.
Features like the Tax Loss Harvesting module analyze a user’s cryptocurrency holdings and identify where the greatest unrealized losses are. This helps traders identify which assets they can strategically sell to reduce their overall tax liability.
CryptoTrader.Tax has also teamed up with the TurboTax team and built a direct integration into the TurboTax platform. This allows users to import their cryptocurrency tax reports directly into TurboTax so they can easily include them on their tax returns for the year.
In addition, the CryptoTrader.Tax platform is extremely intuitive and easy to use. This is the main reason investors flock to the platform. You don’t want to learn all of the tax rules yourself. They want an easy to use platform that can automate the process for them. This is what CryptoTrader.Tax does best. We also employ a full team of live account managers to help our clients along the way when they get stuck at all.
Where are we in the crypto tax season and how can crypto traders prepare well for the coming season?
The official start of the tax season is just around the corner, January 27, the day the IRS officially begins accepting electronic tax returns. With this date only a few weeks away, now is the best time to prepare and assemble all of the tax documents you will need.
The best way for crypto traders to prepare for tax season is first and foremost Learn how cryptocurrency taxes work. From here, you should take the time to compile a list of all the exchanges and platforms that you have used in cryptocurrency transactions in the past. Once you’ve put together such a list, it’s easy to import everything into cryptocurrency tax software to run your tax reports.
Could you clarify why cryptocurrency exchanges fail to provide accurate tax reports to users?
Since users are constantly transferring crypto in and out of exchanges, the exchange has no way of knowing how, when, where, or at what cost basis you originally purchased your cryptocurrencies. It just sees them appear in your account.
The second you move crypto into or out of an exchange, that exchange loses the ability to provide you with an accurate report detailing the cost base and fair market value of your cryptocurrencies, both of which are mandatory components of your tax return .
This creates a fundamental problem in the industry that is very different from traditional stock brokers or exchange trading platforms; namely, that exchanges do not have the ability to report capital gains and losses to their users.
What are the key elements of how governments treat cryptocurrencies from a tax perspective? For example, how does the IRS see crypto?
According to official IRS guidance, Bitcoin and other cryptocurrencies should be treated as property for tax purposes – not currency. This applies to all cryptocurrencies such as Ethereum, Litecoin, XRP, etc.
This means that crypto must be treated like owning other forms of ownership such as stocks, gold, or real estate. Just like you would in stock trading, you will need to tax your capital gains and losses from your cryptocurrency trades. Failure to do so is considered tax fraud in the eyes of the IRS.
Can you tell us about your team and your customer support?
We employ a full team of Client Success Agents during the busy tax season. One of our biggest goals at CryptoTrader.Tax is to always be there for our customers. A world-class customer support team helps us with this, and that’s a big reason why so many of our customers use a platform like ours – they just have someone to turn to and answer questions.
How secure is CryptoTrader.Tax, would you like to talk about your legal and security measures?
CryptoTrader.Tax uses SSL encryption on every single website to ensure that your data remains private. We also do not pass on any data to government agencies. Your data is yours, and we have a world-class team of technology professionals to keep it safe.
Do you have more information for our readers?
Yes, not only are we a platform directly for crypto investors themselves, but we also offer a full Tax Professional Suite for accountants, auditors and tax professionals who need a software solution to serve their own customers. Find out more about how our Tax Professional Suite works Here.
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