How to prepare cryptocurrency taxes in 4 simple steps

[dleedon]

Let’s go through the process of preparing and reporting your cryptocurrency taxes step by step. 

 

First, you calculate your capital gains and losses. Make sure you choose a specific cost basis and use the following equation to get these values:

 

Sales Price - Cost Basis = Crypto Gains/Losses

 

The second step is to familiarize yourself with the IRS’s Form 8949. Form 8949 will have two series of rows and columns (Parts I and II) where you will input your data. Cost basis, sales price, and gains/losses will be some of the data you’ll have to input.

 

The third step is actually filling in the 8949 and its accompanying Schedule D form. Group your short-term and long-term gains and losses together. Then, confirm on Parts I and II of the 8949 which types of short-term and long-term gains and losses you are submitting on the form. Select only one option out of A, B, or C from Part I and only one option out of D, E, or F from Part II. Once these have been selected, fill in the rows and columns on Form 8949 and Schedule D.

 

The last step is to include other forms of crypto income to your tax report, such as forking rewards and mining income. There is quite a variety of these other forms, but you don’t have to worry about these as much with Cointelli. Cointelli is designed from the ground up by seasoned CPAs and engineers to make it as simple as possible for you to accurately and swiftly produce a unified crypto tax form. Check us out at cointelli to learn more. 

[Jone]

If you're into crypto, you probably know about Decentralized exchanges (DEX)💸 which allow people to swap cryptocurrency on a peer-to-peer basis with no third party. New DEXs are mushrooming by days if not by hours. 

So, what are the nex gen DEXs? Let’s lift up a curtain on this golden list🔥

1️⃣Uniswap V3
 (https://uniswap.org/)Uniswap V3 is the improved version of the Uniswap protocol - one of the most popular Ethereum-based DeFi protocols in the crypto market. The main bullet of V3 is the concentrated liquidity which results in higher capital efficiency and trading fees for traders and liquidity providers.

2️⃣Algebra.Finance
 (https://algebra.finance/?utm_source=telegram&utm_medium=social&utm_campaign=farming)Algebra.Finance is the new-age DEX built on Polygon. On top of concentrated liquidity, Algebra offers built-in farming, adaptive fees, and cross-chain integrations. With such game-changing features, Algebra has all the cards to compete with Uniswap V3. As of now, only on Uniswap and Algebra you can use liquidity positions.

3️⃣QuickSwap
 (https://quickswap.exchange/#/swap)QuickSwap runs on the same liquidity pool model as Uniswap giving advantage on the speed and low fees offered by the Polygon blockchain. Compatible with Ethereum, QuickSwap allows you to exchange ERC-20 tokens as well.

4️⃣Curve (https://curve.fi/) 
Curve is a DeFi protocol designed to lower fees and price slippage for trading stablecoins. For now, Curve remains the best place to exchange not only stablecoins but tokenized versions of Bitcoin (renBTC, sBTC, WBTC) as well. 

5️⃣Sushiswap
 (https://www.sushi.com/)SushiSwap is a decentralized exchange and lending market in one place. Incentivizing users to operate the platform, SushiSwap enables yield instruments and staking derivatives. With a collection of liquidity pools, SushiSwap lets users lock up their assets, and traders buy and sell crypto from these pools.