I have made 300+ crypto currency transactions in 2018. Do I need to report all these 300+ transactions to IRS? If yes, what is the procedure?
My tax consultant is saying we need to report only aggregate total short term loss only (no gain for me). Is it correct? I haven't received any 1099 form from any of my crypto online exchanges.
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Compare to over-the-counter Forex and that is reported either on 1040 Schedule 1 Line 21 or reported on Form 6781. Use of Form 6781 requires that the Forex currency pair be also available as futures contracts. Form 6781 requires an attached statement while 1040 Line 21 allows an attached statement. In either case there are no wash-sales and no unrealized gains carried. Futures get a 60/40 long-term/short-term capital gain/loss accounting while Other Income can be an unlimited loss deduction.
But reporting cryptocurrency transactions as capital gain/loss would require itemizing on a Form 8949:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf
Compare to day traders making hundreds of trades per day that use a Form 4797. They are not subject wash sales but also don't carry unrealized gains across the year.
I would itemize on Form 8949 for cryptocurrencies. Of course manual wash-sale accounting might be required depending on the trading style.
The details do need to be reported, typically this would be done on Form 8949 which then feeds aggregated results to Schedule D.
In cases where you have too many trades to fit, you'll submit attached statements that provide the same information, per the Instructions for Form 8949:
Exception 2. Instead of reporting each of your transactions on a separate row of Part I or II, you can report them on an attached statement containing all the same information as Parts I and II and in a similar format (i.e., description of property, dates of acquisition and disposition, proceeds, basis, adjustment and code(s), and gain or (loss)). Use as many attached statements as you need. Enter the combined totals from all your attached statements on Parts I and II with the appropriate box checked.
For example, report on Part I with box B checked all short-term gains and losses from transactions your broker reported to you on a statement showing basis wasn't reported to the IRS. Enter the name of the broker followed by the words “see attached statement” in column (a). Leave columns (b) and (c) blank. Enter “M” in column (f). If other codes also apply, enter all of them in column (f). Enter the totals that apply in columns (d), (e), (g), and (h). If you have statements from more than one broker, report the totals from each broker on a separate row.
So your Form 8949 would have one row per exchange for each part (Part I - Short-Term, Part II - Long Term).
There also appear to be crypto-specific products that offer to do this for you, but hopefully the exchange output is friendly enough that you can easily standardize it in a spreadsheet program to match.
