Quote from: mikelexus on December 19, 2018, 08:12:06 PM

Does anybody know how to do a tax return if you bought BTC in 2017 and sold in 2018?

I think, my situation is not uncommon Embarrassed

I purchased around 3 BTC in total in December 2017 at around 16K, then I sold it later in 2018 at 6K Embarrassed

According to my research, the basic approach is to fill out form 8949 and attach it to 1040 Schedule D. The problem is that it spreads through more than 1 year, so I cannot do it automatically by exporting coinbase reports and using bitcoin.tax

I believe, I can use this formula: Total sale amount basis = realized gain/loss

In my case, total sale amount is 3 * 6 = 18K

all of your transactions fall under "box c" on form 8949 since you have no 1099. i believe you can only aggregate all your different positions together if they were reported on a 1099. since they weren't, i believe you need to show the basis (and loss) for each lot you bought and sold. if you didn't sell in clear lots, then you can use one of these methods (FIFO being the simpler one): https://taxmap.irs.gov/taxmap/pubs/p538-001.htm#TXMP5501c5e3

the above formula is correct. if you bought 1 BTC at $12k, the basis is $12k. so if you sold that 1 BTC at $6k, the realized loss is $6k. each of these transactions comprises a line on the 8949. the net loss goes on lines 7 and 16 of schedule D.

now for the bad news: the maximum capital loss you can deduct (as you'll see on line 21 of schedule D) is $3000. Undecided