The start-up company said the product was spurred by the inclusion of a question about cryptocurrency investments planned for the 1040 Schedule 1 for Tax Year 2019 returns. The question is the following: “At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”
The Internal Revenue Service estimates roughly 12 million tax returns should reflect cryptocurrency investment.
The new software enables professionals to invite clients to create an account and import cryptocurrency trades. CryptoTrader.Tax will flag any missing cost basis. It generates reports can be downloaded and imported into tax preparation packages, including Intuit ProConnect, Drake Software, ATX and UltraTax.
CryptoTrader.Tax, which supports 35 crypto exchanges, generates an Audit Trail Report and will generate and auto-fill IRS Form 8949 with short-term and long-term gains from cryptocurrency trading for attach to returns. A dashboard is provided for managing clients and centralizing data.
Professionals can create accounts for free. Trading reports are available for Tax Years 2010 through 2018 with pricing based on the numbers of trades per year as follows: Hobbyist, $49 per season for up to 500 trades; ProTrade, $99 per season for up to 1,500 trades; High-volume Trader, $199 per season for up to 5,000 trades; Unlimited trades for $250 per season. High-volume and unlimited customers receive priority support
CryptoTrader.Tax also has a tax loss harvesting tool built that can automatically identify which of an investor’s cryptocurrencies present the greatest loss harvesting opportunity.