Cry for Help: The Absurdity of Crypto Taxing in 2025!

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Lo and behold, dear readers! As the relentless machinery of the IRS grinds ever onward, casting its scrutinizing gaze upon the beleaguered souls who indulge in the dizzying highs and lows of cryptocurrency, we are reminded that it is no longer solely about paying those pesky taxes. Nay! The rules are now akin to a labyrinth, daring even the most astute to falter amidst the yardsticks of compliance lest they find themselves stampeded by the monstrous audit stampede.

And here you are, immersed in the melodrama of Crypto Long & Short, our oft-illuminating weekly epistle, brimming with insights and rants for the professional investor. Do sign up, my friends, lest you wish to wallow in ignorance!

Behold, five egregious miscalculations lurking in the shadows, ever eager to ensnare the unwary crypto investor.

  1. Neglecting wallet-based accounting: Truly, one must weep at the thought of conjuring a mere spreadsheet! The IRS now demands a meticulous ledger of each wallet’s wearied transactions. Hot, cold, it matters not — track them all, for a moment’s indiscretion can awaken the slumbering leviathan of audits! Yet, with tools like CoinTracking and others, perhaps salvation lies at our fingertips if only we dare reach.
  2. Misreporting staking rewards: Imagine the horror, the existential dread, when you gaze upon your precious crypto only to realize the IRS has stolen your joy! Staking rewards — they must be reported posthaste upon receipt, not merely upon sale! A dismal fate indeed awaits those who misstate these amounts, condemning them to the judgment of the ever-watchful regulators.
  3. Overlooking IRS letters and form 1099-DA: Surely we jest, you think! And yet, letters from the IRS, cryptic and foreboding, may arrive offering keen insights into your reported discrepancies. “Answer us!” they bellow. And let us not forget Form 1099-DA, the harbinger of doom for mismatched figures. One must tread carefully lest a bureaucratic misstep lead to your doom!
  4. Failing to report all transactions: Do you think those piddling trades on a decentralized exchange will slip through the ever-watchful eyes of the IRS? Ha! They possess a contraption of extraordinary precision honed to detect even the smallest whisper of deception. Each trade, airdrop, and reward must dance upon your tax filing stage — failure to declare will not furnish escape.
  5. Missing the chance to adjust cost basis: Here lies a glimmer of hope amidst the dismal abyss: the opportunity to adjust your cost basis, oh sweet tax year of 2025! Reallocate your squandered chances and keep records ferociously detailed, or risk awakening the IRS monster filled with insatiable lust for audits!

Staying audit-ready

The perplexing world of crypto taxation may haunt your nights, yet it is not devoid of sanity! One must embrace the art of maintaining impeccable records and seeking the counsel of reliable crypto tax software, lest one be consumed by the opaque void of compliance. Prepare yourselves, dear investors, for the IRS may seek your truths — prioritizing those investments that truly matter in this absurdity we call life.

Please find more revelations in the full article rather than languishing here!

Note: The musings expressed herein hardly represent the sentiments of CoinDesk, Inc., nor do they reflect sympathetically upon its owners or affiliates.

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2025-04-02 18:49