• Adam Kae & Associates

NFTs, Crypto and Powerful Impact on 2021 taxes

By Adam Knihtila

Crypto Will Impact 2021 Tax Returns
Crypto Will Impact 2021 Tax Returns

2021 was all about the crypto markets and NFTs. But, what does all of that mean when it comes to how crypto will impact 2021 tax returns? Whether buying, selling, trading, swapping, converting, exchanging, etc. you need to understand how crypto affects your taxes and what information you need to provide to your accountant.


Here are some things that YOU need to do

  • Track EVERY transaction that you make with Crypto, NFTs, etc.

  • Report EVERY transaction that you make with Crypto, NFTs, etc.

  • Understand WHAT is a taxable transaction

  • Understand WHAT isn’t a taxable transaction

  • Use a professional to prepare your taxes that understands Crypto, NFTs, etc.

  • Educate yourself BEFORE investing


What is a Taxable Transaction?

  • Selling Crypto or an NFT and receiving fiat currency

  • Selling Crypto or an NFT and receiving crypto or an NFT

  • Buying an NFT with crypto

  • Swapping from one Crypto to another

  • If you use terms like Convert, Trade, Exchange, Burn, etc. it is likely a taxable transaction


What isn't a Taxable Transaction?

  • Transferring Crypto or an NFT from one wallet that you own to another wallet you own

  • Buying crypto with fiat currency

  • HODLing


Educate yourself, Educate yourself, Educate yourself


Here is a great resource from Work From Home Financial to track all of your crypto transactions in one easy place!


If you said “I'd like to hire a Strategic CFO in 2022” it is time to book a consultation with CFOAdam!


Regardless of your current size, Adam Kae & Associates can guide you every step of the way. The best way to avoid costly financial mistakes is to prevent them from happening in the first place, and that’s what a CFO is for!

 

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Disclaimer: This article contains information and opinions from Adam Kae & Associates, and the information and opinions should not necessarily be seen as the best possible solutions for your business. Please contact us at info@adamkae.com to help you find the best solutions for your business.


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