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In the United States, cryptocurrencies are treated as property for federal income tax purposes. Consequently, investors are required to pay taxes on capital gains incurred when they sell their crypto.

While those who trade stocks typically get a form 1099-B from their brokers, crypto investors are not as fortunate. The burden of collecting information from all the exchanges they deal with falls on them. Making matters even more complicated is the fact that crypto traders often use one crypto to purchase another crypto or they use Uniswap which can’t possibly know how much you paid for the original crypto.

If all this sounds complicated to you, that’s because it is. However, at Tax Masters, we are experts in crypto and stocks and will be happy to help you navigate this maze.

In case you are wondering if the IRS knows about your crypto, we can assure you that they do. All exchanges located in the US report to the IRS. Not reporting your crypto trades is the fastest way to get audited and the penalties can be very severe.