r/CryptoTax • u/AlfalfaTemporary6574 • May 21 '25

Letter from IRS

So I just got a letter from the IRS, but it's a bit vague. Basically saying they know I have a wallet, and might need file an amended return for one or more years. I want to deal with this in a timely manner but I'm not sure where to start. I haven't sold anything in 7 or 8 years, when how to deal with taxes was unclear. And haven't even traded or exchanged anything in I'd say 3 or 4 years. I didn't realize that exchanging was a taxable event at that time. I've never filed an amended return and the letter lists a ton of different forms I might need or use. Can i figure this out on my own with the info from my exchange? Should I try calling the irs hotline# on the letter? Would it be worth trying to find a crypto tax accountant or something?

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u/wwww7575 May 22 '25

No sale=no profit=no taxes.

1

u/Albert14Pounds May 22 '25

They exchanged. And given the amount of time passed, whatever they "sold" probably went up in value and is therefore reportable gains.

5

u/wwww7575 May 22 '25

Exchanged yes that’s taxable if it resulted in gains but there is no tax on unrealized gains in US so if he bought btc 8 years ago and it’s increased in value the tax due is 0 unless he sells

https://www.jacksonhewitt.com/tax-help/tax-tips-topics/personal-finance-savings/unrealized-gains-tax/#:~:text=Unrealized%20gains%20are%20not%20considered,no%20tax%20on%20unrealized%20gains.

3

u/Albert14Pounds May 22 '25

But they did exchange 3-4 years ago and likely realized gains.

2

u/Doctor_Fabian May 27 '25

But nothing has gone up. Everything is down besides Bitcoin. I know a ton of people never reported because most of it was losses. This is going to be a mess. It's impossible to track everything even if your very careful. Tracking 10 years ago and every exchange is impossible. Ver is in prison and he did everything legit. They are holding him prisoner even if he is not a USA citizen

1

u/Albert14Pounds May 27 '25

What matters is if they went up between when he bought and when he sold 3-4 years ago

1

u/Doctor_Fabian May 27 '25

But what ever he sold that was up down. What ever he exchanged went down. So that would make up his loss. If he sold

1

u/wwww7575 May 22 '25

Agreed, you are right that is definitely taxable