Hello Entrepreneurs!
It's been a year since we started BearTax and serving a lot of cryptocurrency traders in consolidating, processing and providing tax necessary documents. We just wanted to explain the complexity involved and why the problem was worth solving.
Cryptocurrency like Bitcoin is traded on thousands of exchanges across the world — to be exact 16002 as of today as per Coinmarketcap.com. So complexity here is,
- Its price changes every second.
- It’s different on every exchange.
- It is traded 24x7x365 days a year — Market never sleeps, unlike stocks!
- Imagine not just Bitcoin, there are 1500+ of those!
- Trading one crypto to another is taxable — how do you calculate gains in Fiat(normal) currency like USD? Can do for one, what if you’ve converted Bitcoin to Ripple & used it to buy Litecoin, withdrew from an exchange for safety & deposited it back to buy Ethereum, used it to buy some tokens in an ICO (an IPO equivalent here).
- Which of those actions are taxable and which are not?
- How do you keep track of prices every second if you are a day trader?
- When you look at your trades at the end of the year, how do you reconcile everything?
We have built BearTax as a solution for all this confusion, which can do it all for you — Just in a few minutes!
Yes, it can understand what is a taxable event, it knows how to smartly match deposits and withdrawals to keep right purchase price assigned for a quantity of digital currency, can fetch the price for any given timestamp on any day for more than 1500 cryptocurrencies, it can derive fiat transactions from crypto to crypto transactions (Eg: Buy ETH with BTC meaning selling BTC for USD and buying ETH with USD).
If you have traded cryptocurrency in the past and looking for a solution to help consolidating them all and get tax documents as either 8949 IRS form or export it to TurboTax Online, give it a shot. www.bear.tax
If you have more than 250 transactions, TurboTax has a limit and even your accountant will freak out - so download an aggregated format of 8949 or TurboTax online CSV in that case.
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