Crypto Tax Advisor

Written By: Ryan Mink, CPA

There was a recent article posted on Forbes that I want to recap here because I believe the author, Dr. Sean Stein Smith, did a great job summarizing some key considerations when looking for a professional to help with tax preparation and planning for digital assets.

Fresh out of tax season, this topic will be top of mind for those that have been bitten by the digital asset bug. Some of us are deep in the space with miners in our basements, central exchanges for onboarding fiat, and decentralized wallets for maximizing our on chain access. Others bought Bitcoin on Paypal or picked up a cool NFT on Wherever you land in the spectrum, you’ll need to find someone to help walk you through your reporting obligation for crypto taxes.

Suppose your activity is limited to one central exchange (e.g., Coinbase). In that case, you will most likely receive or have access to something similar to a 1099-B which will summarize all of your activity on their platform. Not all exchanges will have this, but you may get lucky. However, if you had activity on more than one exchange, moved funds between exchanges, or dove deep like I did, you’ll need to enlist the help of a professional.

Dr. Smith listed three things to consider in his article:

  1. Experience vs. Experience – Preparers may have significant experience preparing and dealing with general taxes. However, with the digital asset space being so new and its continued evolution, you want to make sure the professional you select has direct crypto experience.

Suttle & Stalnaker has experience with assisting avid crypto traders, mining farm operators, NFT project developers, and more.

  1. Active Crypto Experience – It is important to know how much hands on experience the tax preparer has outside of servicing clients. Many issues that could complicate the preparation process are only fully understandable if everyone involved has dealt with them on their own. This includes things like wallet security, management of private keys, NFT minting, staking, mining, and farming.

Suttle team members have direct experience with the activities listed above and the corresponding reporting and tax consequences. We are committed to staying up to date through ongoing education.

  1. Comfort with ambiguity – The tax code is written with detailed rules and regulations full of exceptions, carve-outs, and other nuances that preparers need to be aware of. Add to that the still developing crypto specific guidance that may or may not be officially adopted, and you need a professional that is well versed in the ever changing regulatory landscape that’s willing to walk through your situation to help you understand the proper treatment.

The Suttle staff involved in our digital assets practice focus their continuing education on this space. They research and read industry specific material, participate in global affiliations specifically geared toward digital assets, and train other professionals on the most recent technical guidance.

If you are looking for someone to help you with your digital asset tax reporting, please email or give us a call and let’s talk through your situation to see how we can help. One of our goals is always to help make sense of our client’s financial information so they feel comfortable with their situation.