AMA: How to Do Your Crypto Taxes (2024) – Andrew Gordon, Tax Attorney & CPA – 9am CDT to 12pm CDT March 8th

Hello, r/CryptoCurrency! I'm Andrew Gordon, your go-to tax attorney and CPA for all things crypto tax-related. Since 2014, I've been helping investors and businesses navigate the complexities of crypto taxes, from audits to tax returns and everything in between.

The world of crypto taxes and IRS rules is complex, but I'm here to make it simpler for you. Whether you're curious about the tax implications of your crypto investments, how to report them, or ways to optimize your tax situation legally, I've got your back.

Got burning questions on crypto taxes? Need clarity on reporting, staking, mining, NFTs, DeFi, Celsius paybacks, or staying IRS-compliant? Let's dive right into it.

I'm here to demystify U.S. cryptocurrency tax laws for you. Ask away!

Disclaimer: The information provided pertains to the United States. Information contained in this post and in the comments is intended for general informational and educational purposes and does not constitute legal advice. Reading this post, reading the comments, receiving a reply to your comment, or sending a direct message to this account does not create an attorney-client relationship. Contact an attorney for legal advice regarding your specific situation.

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35 thoughts on “AMA: How to Do Your Crypto Taxes (2024) – Andrew Gordon, Tax Attorney & CPA – 9am CDT to 12pm CDT March 8th”

  1. I live in a country that doesn’t tax crypto. If I were to move to the US next month will I have to pay tax on crypto I own before I moved?

  2. We waived the AMA sponsorship for Gordon Law as this is a PSA AMA for the community where Gordon Law will answer legal questions by our members for free!

    Gordon Law has done a similar AMA before.

    Thanks Gordon Law!

  3. Hey Gordon, thanks for dropping by!
    As an unfortunate victim of Alex Machinsky, and the SS which was Celsius, I was curious if you’ve come to the same conclusion I’ve already heard rumored — that despite our losses, if our cost basis was lower than what was returned we cannot claim a loss? I understand that the situation is further exacerbated by the possibility of further compensation as litigation echoes into the future, but was curious to hear your take. Is there any credence, in your opinion, to setting a fair market value of the asset at the time of our deposit, to seek losses from a more reasonable number, or is that just a fantasy?

    Again, thanks for your time and expertise.

  4. Any advice for how to move to a different tax software without having to re-do the capital gains calculations for years or prior transactions?

    When I first got into crypto back in 2020/2021, before I realized that every coin-to-coin swap was a taxable event, I racked up thousands of transactions and transfers that ended up a nightmare of difficult to track cost bases. I used TokenTax software (which was janky but better than trying to figure it out on my own) and now every year I feel stuck with the same frustration.

    I’ve been tempted to sell it all, wait a month, then buy back and just pay a bigger bill this year so I can reset.

  5. How do we treat the distribution of non-tradable stock shares of Ionic Digital resulting from the Celsius bankruptcy?

  6. Always cool to learn about colleagues In other countries doing their crypto Tax.

    Overall, want to know if unlike México, is true that the USA has diferent rules for Tax depending of the state and how USA manage their VAT.

    Also, if can, aré crypto considered used goods or the Time with the crypto matters?

    1. How does margin trading work? I deposit some token as collateral, take out a loan of a different token, pay interest on that loan, and ultimately pay it back. Can I deduct interest paid? The principal and interest are stored in the same “account” where interest automatically accrues, so when I make payments on the loan, how do I distinguish what’s going towards interest?
    2. There’s no such thing as like-kind assets in crypto anymore, correct? So switching between Algo and gAlgo for example is a taxable event?
    3. If I add to a liquidity pool, I’m exchanging some amount of token A and token B and getting a different token C as the liquidity token. Is that a taxable event? Similarly, when I convert back.
    4. When I have liquidity tokens and rewards are building up, they are in the same account as well. When I go to convert back to the individual tokens, do I consider the reward last? Or only consider that once the amount I added is completely withdrawn? Like LIFO or FIFO
  7. How do you recommend we track taxes for liquidity pool (LP) transactions? Would you record the transaction to the LP as a transaction where all your tokens convert to the LP token? Or do you treat it as individual token entries into the LP.

    As an example, let’s say crypto A is worth $1 and crypto B is worth $10. I move $1000 of A and $1000 of B into an LP. This means I move 1000 A and 100 B into the LP. Impermanent loss will happen as the values of A and B change. This also means the amount of A and B I get back if I withdraw from the LP changes. How would you go about tracking these transactions?

    I typically avoid LPs as they are a headache. When I last used them back in 2020, I did a manual entry converting all of A and B into a placeholder LP token. I then reversed that transaction (half of placeholder LP token to A and half to B) when I removed liquidity. Is this what you would recommend? Or is their a better or easier to implement option?

    Finally, is there a tax tracking software you recommend for the crypto space for someone who invests in LPs? If LPs were easier to track for tax purposes, I would be tempted to do so again.

  8. Hey 13 – 14 years ago, my friend bought 150 Bitcoin for $300 he said if I gave him 10M gold coins in oldrs he would give me 15 Bitcoin and I upheld my part of the deal, it took me ages to make that 10M gold in-game 13 years ago and I am still waiting for my 15 BTC my friend has disappeared and rs gold isn’t worth $3 per mill anymore, real world trading is not allowed in the rules of the game but recently they said it’s okay for friends to give things to each other if it’s ‘in the spirit of friendship’ I told my math teacher about BTC and he walked out on the job eventually bcos he is a millionaire now half the teachers left at the same time bcos he was popular, I feel really ripped off bcos I was just a kid, I went and told everyone about Bitcoin and they all have mansions now, I’m dirt poor where the hell is my Bitcoin, does this mean my friend owes me over $900,000 now or does my friend still owe me just the original $30? Need to know asap because it’s eating me up watching this bull run

  9. Do we still have to pay taxes to California when we sell crypto after we moved to another state?

  10. My understanding of Puerto Rico Act60 tax saving is as follows:

    price appreciation after you become Puerto Rico resident is tax free, but the price appreciation before becoming Puerto Rico resident are still subjected to tax when you sell.


    For example:

    1. Bob bought one bitcoin at $0.
    2. Bob became a Puerto Rico resident. At the time Bob become a Puerto Rico resident, bitcoin is $10000.
    3. he sold one bitcoin at $30000.

    Bob has to pay tax on the first $10000 gain. The other $20000 gain is tax-free?


    Q1: Is my understanding correct?


    Q2: what is the date to become Puerto Rico resident? Is it the day Bob moves to Puerto Rico, or the day that Bob has lived 183 days in Puerto Rico?

  11. Would it be better to sell a short term capital gain at 40% if expecting a big price drop and rebuying to sell short term the next peak(in attempt to accumulate a larger holding / “share” of the coin)? What would the tax implications on this be?

  12. When staking began, the tax rules weren’t really clear, so tax was never paid on the earnings. Fast forward to 3 years later and someone I know has a decent amount of staking earnings that haven’t been claimed as income. Is it too late to go back and claim those?

    Does an amendment need to be made to the prior years’ returns? How does that work on a protocol that generates earnings every X minutes? For ETH I’m aware of sites like that help you calculate your earnings. Does everything need to be itemised on the return? Or is it enough to just say “I made XXX in whatever coin” for that year? Thanks!

  13. Any advice or example spreadsheet on tracking cost basis for partially closed short positions? I can find advice for tracking cost basis for normal sales, and advice for tax accounting for a short that’s entirely closed for the tax year, but not for one where I’ve bought back and forth and haven’t entirely closed it.

    Also, even the sites that will prepare a form for you, like Gemini, want you to input a cost basis for coins transferred to their platform, but I can’t do that if the coins are borrowed.

    Earlier submission.

    Update: Oh. You just wanted the softball questions.

  14. This year a lot of people will have to deal with NFTs.

    1- Are NFT airdrops considered income like crypto aidrops?

    2- How do you determine the fair market value if you get a free NFT airdrop? If that NFT or similar NFT collection never had any sales at the time you received it, how do you determine fair market value? Can the fair market value and income of an NFT aidrop ever be $0?

    3- If similar NFTs have sold, is the fair market value based on the last one that sold, or the average price it sold for?

  15. My father passed away recently and I’ve been named personal representative of his estate. Included in his assets are a number of crypto currencies I’m working on liquidating.

    As far as taxes and the IRS are concerned, is it enough to sell this currency under my name/SS number and report them to the IRS under the name of the estate OR should I be trying to create a separate account on the available platforms using the EIN provided for the estate and selling through that?

  16. Hey u/Gordon_Law, thanks for doing this.

    Wondering about something about the income received from LPing in UniswapV3.

    Whereas previous liquidity pool taxes were easy since the fees accumulated in the pool itself, V3 has separate fees that gradually accumulate.
    Since it’s impractical to report per fee, since that would be per pool transaction globally within your price range and dependent on others liquidity, what would be the recommended action there?

    Counting the claiming of the fee is simple, but if you’re using just the prices at that point in time, it could create more liability than necessary. Is it acceptable to do something like “averaging the prices” since you began? Since the fees are technically claimable at any point in time?

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