Crypto is a new and exciting form of digital currency that is drawing in lots of first time investors. CPA and TurboTax tax expert Lisa Greene-Lewis joins TheStreet to give an overview of how capital gains taxes apply to crypto transactions.
Tracy Byrnes: The stock market, despite the pandemic, has kind of been on fire. So people have potentially a lot of gains. Crypto's been moving. I mean, you need, you know, Dramamine to follow it, but it has been moving. So there might be capital gains there too. So what do people need to be thinking about?
Lisa Greene-Lewis: Yes, so I know there's a lot of new investors out there. The first thing they need to think about, I mean, I often hear the question people don't even know when their transactions are taxable. So they need to think about, you don't have a taxable event until you sell your stock or crypto. Also, depending on how long you hold your stocks before you sell them, that's also how you're taxed. If you hold your stock or crypto for over a year, then you have the benefit of those long-term capital gains, which are less, you know, you're taxed less. And then also remember if you had any losing stock or any crypto losses when you sold, which a lot of people are not having. But if you did, you can offset your gains with those losses. And then your losses can carry over to your ordinary income like, you know, your W-2 income or self-employment income, and that's up to $3,000.
Tracy Byrnes: So I'm getting my investments together, and crypto, in particular, starts to get so confusing because people are trading in and out of it. How do I even keep track of this with my tax return?
Lisa Greene-Lewis: So we have TurboTax Premier, and it really gets after one of the biggest pain points that investors have. We are able to directly import your stock transactions and your crypto transactions from these financial institutions and crypto platforms. So we can directly import up to 4,000 cryptocurrency transactions and 10,000 stock transactions at once.
Tracy Byrnes: Lisa Greene-Lewis, CPA and TurboTax expert, thank you so much for clearing this up.
Let a tax expert do your investment taxes for you, start to finish. With TurboTax Live Full Service Premier, our specialized tax experts are here to help with anything from stocks to crypto to rental income. Backed by our Full Service Guarantee. You can also file your own taxes with TurboTax Premier. Your investment tax situation, covered. File confidently with America’s #1 tax prep provider.