The IRS has published a longer and much more detailed explanation. ProShares Bitcoin Strategy ETF (BITO) AUM. The Grayscale Bitcoin Trust (GBTC) is a simple way to make a Bitcoin investment through the stock market. The following example, based on one in Grayscale Bitcoin Trusts 2020 tax information letter, demonstrates the burdensome nature of these yearly basis and expense computations. I'm really not happy with turbotax this year. For example, some investors use the "first in, first out" (or FIFO) methodology, wherein the first coins you buy (at what price they cost) are also the first coins you sell. Quarterly Report Form 10-Q Filing Table of Contents Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 1.35M 2: EX-31.1 Certification -- 302 - SOA'02 HTML As a publicly-traded trust, which reports to the US Securities and Exchange Commission (SEC), the Grayscale Bitcoin Trust makes this easy to forget about. You can access it through a brokerage account attached to HSA. A Citi analyst said in November 2020 that bitcoin could climb as high as $318,000 by the end of 2022. Then multiply this amount by the Cost Basis Factor in the 1099-B to get your cost basis for that individual transaction and then tediously put that into each stupid "sale" entry that Turbotax is asking for extra info (cost basis field highlighted with red borders). Grayscale Bitcoin Trust 2018 Tax Letter. Prospective investors in such Product should discuss the tax consequences of an investment in such Product with their tax advisors. News and analysis for the professional investor. Digital Currency Group's Risky Bitcoin Short Could Lead To Default On If Bitcoin Surges to End 2022, Will My Gains Be Taxed? Second, publicly-traded Bitcoin trusts come with various tax advantages. Unraveling the enigma of Satoshi Nakamoto, was he Steve Jobs? maybe not Should You Invest Your 401(k) in Bitcoin? Grayscale also manages the Grayscale Bitcoin Investment Trust (OTCQX . Though the IRS typically dedicates its investigative resources to auditing bigger fish, the outfit is allocating more resources to crypto forensics, and you're better off playing it safe. 1. As large institutions seek to expose their clients to cryptoassets, however, a greater number of similar offerings, as well as the possibility of crypto exchange-traded funds (ETFs), may eventually force more stakeholders and their associated advisers to become familiar with these products. The firm's other trusts include well-known cryptocurrencies such as Ethereum, Litecoin and Bitcoin Cash. Grayscale Bitcoin Trust 2022 Tax Letter - Grayscale To begin this calculation, first look at the total amount of BTC per share paid out as listed on the gross proceeds file. The fund launched back in 2013 as the Bitcoin Investment Trust (BIT) and has grown rapidly since then. And, yes, for those who bought GBTC thinking that it was a hassle-free way to own an interest in some Bitcoin, this is all a gigantic rude awakening. How are Grayscale Trust like $GBTC taxed? Thus, even if a taxpayer has only a single initial purchase, and his or her investment neither appreciates nor depreciates in value, there will most likely be a gain when the taxpayer eventually sells the investment, which will be taxed at the taxpayers applicable capital gains rate.
