Will I receive tax documents for my cryptocurrency trades?
Yes, you will receive two tax documents from Robinhood Crypto, LLC for your cryptocurrency trades. You will received both a .pdf and .csv of your consolidated Form 1099.
How do I enter my crypto tax documents into TurboTax?
- After logging into TurboTax, navigate to the Wages & Income section.
- On the screen where you enter income, find the Cryptocurrency Start button in TurboTax. Cryptocurrency may be under the Investment Income subsection.
- Click: Start
- In the “Let's get your cryptocurrency info” screen, choose the icon that says Robinhood.
- Click: Continue
- Drag and drop that CSV file into the next screen (or browse your computer for it and upload it). If you received a Robinhood Crypto 1099, Robinhood also provided a CSV file with your cryptocurrency transactions.
- Double check that all of your transactions imported correctly, including the proceeds and cost basis.
- Continue through the rest of the process to finish submitting your cryptocurrency income.
You can directly import up to 250 transactions this way.
How is a hard fork reported in my Form 1099?
If you had any cryptocurrency holdings prior to and during a hard fork event that resulted in the creation of a new cryptocurrency, you may be entitled to and be credited one unit of the new cryptocurrency per unit of the cryptocurrency that was subject to the hard fork. Any credit of the new cryptocurrency after the hard fork that you received in connection with the hard fork is not reported as a transaction in your Form 1099. However, subsequent sales of any cryptocurrency holdings credited to you as a result of a hard fork may be reported in your Form 1099. Note that as a result of a hard fork, your cost basis for any cryptocurrency subject to the hard fork may have changed.
For example, Bitcoin Cash (“BCH”) experienced a hard fork on November 15, 2018. If you had any BCH holdings prior to and during the BCH hard fork event, which resulted in the creation of a new cryptocurrency Bitcoin SV (“BSV”), you were entitled to a credit of one Bitcoin SV per unit of Bitcoin Cash you held. For individuals who held BCH prior and during the hard fork, your cost basis for BCH is adjusted to reflect the creation of BSV and any BSV being credited to your account. The combined cost basis of your BCH & BSV holdings after the hard fork will equal the cost basis of your BCH holdings before the hard fork. The cost basis of your BCH before the hard fork was allocated proportionally between your BCH and BSV holdings after the hard fork based on the ratio of the prices of BCH and BSV after the hard fork. Here is an example to help illustrate how the BCH hard fork would affect your cost basis:
Let’s say before the hard fork you were holding BCH with a cost basis of $80. Then after the hard fork, BCH had a price of $100 and BSV had a price of $25. To calculate the new cost basis of your BCH holdings, we would take the ratio of BCH’s price to BSV’s price - $100/($100 + $25) = 0.80 or 80% - and multiply that by the original cost basis of $80 to get $64 dollars. Similarly, we would calculate that the new cost basis for BSV is 20% and we multiply that by the original cost basis of $80 to get $16. After the fork, the total cost basis across both these coins is still a total of $80.
Before the fork:
BCH cost basis: $80
After the fork:
BCH cost basis: $80 * 100/(100 + 25) = $64
BSV cost basis: $80 * 25/(100 + 25) = $16
We provide cost basis information and any applicable cost basis adjustments on your Form 1099 for information purposes and note that there is substantial uncertainty as to how the receipt of forked cryptocurrency should be treated for tax purposes. There is no assurance that the IRS will agree with this approach. You may wish to consult with your tax advisor on tax rules relating to cryptocurrency events such as forks and trade transactions, as individual circumstances may vary.