Hello all,
I have an confusing situation regarding reporting my online poker winnings that I could use some assistance with. I do plan on consulting with a tax professional if need be, but I thought it might be useful to gather some advice here before reaching out. Please note that I based in the US.
In a nutshell, I played online poker on various websites during 2020 (some of which I deposited/withdrew funds from using bitcoin, and some using bank account transfers). It just so happens that I did well on the sites in which I utilized the bitcoin deposit/withdrawal functionality (approximately +$25K), but I lost about $20K on the sites in which I used bank deposits.
It seems straight forward up to this point ($5K net profit), however, I am unsure how the cryptocurrency exchange (Coinbase) will report this. I have not received my tax forms from Coinbase yet, but I am assuming they will show that I sold $25K more of bitcoin than I purchased, thus generating a taxable event. Obviously, I did not actually make $25K, but the exchange does not have the full picture. Is there a way to special way to report this when I am filing my taxes? It should be noted that I did not speculate on bitcoin at all during the 2020 calendar year and all gains/losses from this timing difference are immaterial. I only used it as a means for deposit and withdrawal for playing online poker.
Any help would be appreciated! Thanks.
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