Pacun

"Curious, if your client hasn't done a good job of keeping track of their transactions and they don't have the reports you need then what?" They can log on to their exchange and get an Excel Report. It is tricky to find the information but it is there. Binance.us has a pdf version also which is a lot of pages, but it is easier to find what you need. To give you an idea, if you purchase $10K in a coin, you would think that you will have an entry in excel showing the 10K and the amount of coins. Most of the time yes, but sometimes 100 people have $20 to sell and the computer has to buy from them. So you end up with hundreds of purchases with different prices. Most people will tell you, I started with 20K and ended up the year with only 14K... that means nothing. A person with that information could perfectly need to report $25K in short term gains even though he is loosing money. Luckily you will get a client that started last year, that's easy to find cost and proceeds but if they have been cryptoing for 4 years, you will have 4 years to dig in to find the cost of the sales. I am keeping a log for 2023... last year I only logged sales and went to look for cost on line. That's becoming hard, so this month, I am entering a line with cost for every coin I have so that when I sell in 10 years (I wish) it is easy to enter the date, proceeds and amount of coins/token sold. Bottom line, ask your people to purchase a crypto trading journal an enter every transaction as they occur. If not, you will spend a lot of time trying to make sense from excel files.

Please don't downgrade your computer just because... As soon as Windows 11 came on board, I upgraded and I have never had any issues. In your case, I would install ATX 2021 with its data on the new computer and then install ATX 2022. I always keep my old computer handy the next tax season. After the next tax season, I disconnect it from the LAN and turn it on when needed. I keep it for another year or two and then there is no need to go back to it.

I just want to say that mining bit coin with a personal computer is like running Daytona 500 on a bicycle. With the bit coin hash rate difficulty, you will never mine any bitcoin. I agree crypto is new but in about 5 years more than half of our clients will have crypto transactions and we might have to reconsider if we want to turn them away. Fidelity, paypal and some banks are now offering crypto to their clients and soon other institutions will follow suit. So the sooner we help our clients the better.

It only matters on the year that your license ends. Two days ago, while renewing my PTIN, I saw that I have to renew my license in March 2023, which I completely forgot. I panicked because this year I had only 18 credits. In my head, I said... "I am short if every year I have don't the minimum requirement". Luckily, on that website they have my CPE credits and I had a lot in one year so I had exactly 72 credits. I am happy you noticed it now because 48 hours later, it would be too late. Everybody, please double check if your license expires in March, so you still have time to pass the CPE exams.

Still taxable. Papers means nothing... you must report your gains and pay taxes on them if any. Remember that I don't know where my bank has the database of my transactions by block chain is open to anyone who wants to see my transactions and any profits I made. So the fact that the IRS has said to the crypto exchanges that they don't have to report to the IRS, it doesn't mean that we don't have to report gains and it doesn't mean that the records are not available to everyone.

China has banned crypto because they are creating their own digital yuan and don't want any competition. On other posts we have said that our industry is shrinking because Turbo tax has gained popularity and each client they have taken, has been taken from our pools. Other free efiling platforms have also sliced our pool. We should embrace crypto because it will save our jobs, at least for some of us. The sooner we embrace it, the better. The genius is out of the bottle and unstoppable. In 5 years, every other person (at least) will have crypto transactions. I work for a company and I get paid... with something... let's call it money. I don't see it and don't touch and I don't know where it is registered... but it is registered somewhere... not the block chain. Every other week, a transaction is registered debiting my employer's account and crediting mine. The next day, my creditors are credited and those amounts are registered somewhere. NONE of us see the money and we only know that an entry has been kept somewhere. We have been using a crypto similar "thing" for a while, correct? At least I have. With Covid-19, I was happy I never had to touch money and preferred those registered transactions where ever they existed.

Sch C income $88,000 Sch D 141,800. For simplicity: 1a $4,800 $14,000 = -$9,200 1b $2,000 $1000 = $1,000 8a $250,000 $100,000 = $150,000 If short term loses were larger than long term gains, we would use $3,000 loses and carry the remainder to future years, correct?

Let's say someone invested 2 billions in Zec in January 2022 and they sold them in March 2022 for 4 billions. Zec really doubled in price between January and March 2022. Then you moved to a more "stable" coin and you purchased 4 billion in bit coin. On March 31, bit coin cost $46,000. Currently it cost about is about $16000. Needless to say that the company has less than its 2billion original investment right now. So if the company doesn't sell bit coin before year end, it will have a tax bill for 2 billion dollars of short term capital gains. By selling the bit coin they can have a loss in their return or they can sell just enough to pay 0 taxes. They can sell and purchase immediately after the same amount of bitcoin and be OK.

Not such an animal in crypto! Wash sales don't exist.

Excellent, but based on hash difficulty, it will be hard to find someone doing it as a hobby who has mined any bitcoin in 2022.

Item 5 is a freebie. Reduction in purchasing price of the computer.

I guess we have to understand how bitcoin is mined and I wish I had an example of someone who has mined 6.25 bitcoins as a hobby but I don't. The definition that you have a choice between schedule C and hobby is for other coins that you can mine with hard drives and a home computer, but if you want to try to answer the problem as a hobby, please go ahead. Some other people might do it on schedule C as suggested. Nothing wrong with either approach.

Mining bitcoin is schedule C income per definition since so far no one has a hobby of mining bitcoin. The reason for the exercise is to help at least one of our colleagues. Also, since we are the professionals helping people to report their earnings/loses, we need to practice crypto because later on we won't have time to read about this subject. The exercise seems to be easy because it doesn't include harder/divided subjects such as NFTs, staking, hard forks, liquid pools, wrapped coins/tokens, validators rewards, P2E, and many other ways of making money from Crypto.

Since hobby expenses are not currently allowed, it makes sense that the taxpayer insists on Schedule C. As his preparer, I would be inclined to report it as a hobby.

How will this single tax payer report these transactions that happened in 2022: 1.- Client had his computer mining bitcoin and sold one bit coin for $16,000 at the very moment he had dominion and control of his 6.25 coins he mined in 2022. He is not going to get more coins this year for our example. For his mining operation he has utilities cost of $10k and depreciation expenses for $2k. 2.- at the beginning of 2022, he purchased 4 ETH coins at $3,500 each for a grand total of $14,000. In November 2022 he sold his 4 coins at $1,200 each for a grand total of $4,800. 3.- in 2020, he purchased 10 Yfi coins at $10,000 each for a grand total of $100,000 and sold them in 2022 at $25,000 each for a grand total of $250,000. 4.- In January 2022, he opened a crypto debit card and funded it with 100 Solana coins he purchased at $10 each for a total of $1,000. In March 2022, he used his crypto debit card to purchase a computer for his in-laws and paid $2,000 using all his Solana coins which had doubled in price. 5.- For using his crypto debit card to purchase the computer he was rewarded $200 in fiat which he pocketed. Could you please let me know the net income on Sch C, amount Short term gain/loses and any carry over and Long Term Gains? Thank you.

I wish I could enlighten you but I am asking questions, hence my ? (question mark) at the end of each sentence.

If he insists that he is in business, it is because his schedule C has a bunch of deductions, correct? Wil an audit read "no changes" if audited? Is he getting earned income credit by using his winnings on schedule C?

Let's say you have .5 million in bank accounts and a house and you want a to set up a living trust, how much does it cost? Will you use a local lawyer or someone on line?

You don't need to send anything to the IRS, just the forms needed for a regular case. If she has a final divorce dated in November 2022, you will need to know if she maintained the home, which was the main home of her child for at least 6 months in 2022. It will be nice if age of the child was provided and if he was full time student. Assuming he is 18, no need for full time student status. So you need to concentrate on who maintained the home from Jan to Sept and is she maintained it for 4 months (plus nov and dec), and it was the main home for child, she can claim Head of Household even if the other parent claims the child.

Let's say that you have 3 computers but each one is a stand alone computer. Your password is checked by each computer independently. In most cases, you only need to have the computer you are using on and everything will work. On a domain, there is a server, and the other computers are workstations. When you log on to the workstation, the server verifies your user name and password. In the case of ATX, you install the server software for ATX on the server and most likely that server holds the clients' data. If the server is down, you don't have access to your clients data. The advantage is that everybody in the office uses the same data repository and everybody has access to all the clients (if needed). You don't need a domain to run ATX server but the computers need to be connected to each other and be using the same IP subnet, but having a domain is better when you a few computers. Technically, you can install the server portion on laptop running windows 10/11 and that becomes, NOT the server for the domain, but the server for ATX. Then you can connect other desktops, laptops or servers to that laptop and they are the subordinates of the laptop running the ATX server software. Keep in mind that the laptop still reports to the domain server (controller). Please ignore this last paragraph if needed.

yes, there were two distributions.... one for 45K and another for 99K. Client paid taxes and penalty on the 45K. the 99K was divided in 3 years and for 2020, 33K were re-invested (rolled over). IRS is wrong and I have seen the signed 8915-E form and sent a copy to the "auditor".

client withdraw 99K due to covid in 2020. Wife (filing jointly) had her workplace shutdown in 2020. On March 26, 2021, client deposited back 33K to his plan as a rollover for year 2020. IRS letter states that $144K were distributed and only $45K were reported as income. As you know, those $99K could be divided 3 ways and reported 1/3 in 2020, 1/3 in 2021, 1/3 in 2022 AND the whole or portion amount could have been rolled over before April 15, 2023. (1040Xs might be needed if taxes paid and monies were rolled over) I have seen people on this forum citing the sessions of the code when replying to posts. If you have a letter or cites please share them since I am preparing a letter for the IRS. Client efiled and form 8915-E was added as pdf.

I would efile as soon as possible and pay from my pocket any penalty. It happened to me once and by paying the penalty from my pocket, I never forget to efile anymore. After that event, every April fools day, I click on each return on return manager to see if efile was accepted. If I don't see the efile transmission, I check my paperwork. I also make a note on return manager if client picked up her/his papers and didn't file with us. I also make a note such as "2021 by mail" if forms were sent by mail. As you know, checking 1000 returns on return manager might take you an hour but it is a good investment. I think I use the field named "client #" to make my notes. Since this field is rolled over each year, I make sure I use the year that was paper filed so that I don't get confused in subsequent years. "Paper filed" will not cut it for me.

Transportation is ordinary and necessary for that job. So, I would ask him how many miles he ran his car last year and then ask him to calculate what percentage was business vs personal and enter that information against schedule C. Most of the time, I prepare returns, I don't audit my clients. Since he is under EIC, he didn't make a lot of money. He might know how many houses he painted and how many days he works on each house (on average), he might know the distance to the house and then you can help him to recreate. Again, ordinary and necessary is key.

The same way you do it when you prepare a regular return... by clicking on the form that needs to be added. If you are paper filing, you need to attach new forms that were not originally filed AND forms that have changed. If the customer efiled, you should be able to efile the amended return and as long as you fill out the new forms, they will be included in the efile file.