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Using digital currency?

You’ve probably triggered a taxable event.

Let NODE40 take it from here. Try our easy Blockchain Accounting software for free.

1. Import Wallet Transactions.

2. Annotate Transaction Details.

3. View Your Reports.

It’s time to start treating digital currency like any other taxable asset. According to the IRS, every time you use Bitcoin, Dash, or any other digital currency, you are triggering a taxable event. Click here to see if your activity is taxable.

Leave it to us

NODE40's Blockchain Accounting software is built by experts, specifically to calculate tax liability on digital currency. Upload your transaction details and we’ll do the rest.

Our software will accurately calculate gains and losses, and identify whether a gain was short-term or long-term. And, to make sure you don’t over-report on gains, we’ll calculate the cost basis for each transaction. Try it for free while we're in Beta, and for under $20 per month thereafter.

How it works

1

Import Wallet Transactions

NODE40 analyzes the blockchain and provides the valuation data for every transaction.

2

Annotate Transaction Details

Customize each transaction if necessary according to your real-world needs.

3

View Your Detailed Reports

Automatically receive your reports from NODE40, including gains, losses and income.

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Here to help

If you need advice or assistance with any stage of your setup, our experts are on hand to help.

Is my activity taxable?

Here’s what the IRS has to say about when to tax digital currency.

Transacting

A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.

Since digital currency is classified as property by the IRS, the book-keeping involved in each transaction is extremely long-winded. It’s one of the reasons people don’t use gold or other precious metals to purchase goods and services. In both cases, the cost basis of property must be tracked across the transaction, and then gains and losses must be calculated.

Mining

Notice 2014-21 A-9: If a taxpayer's "mining" of virtual currency constitutes a trade or business, and the "mining" activity is not undertaken by the taxpayer as an employee, the net earnings from self-employment (generally, gross income derived from carrying on a trade or business less allowable deductions) resulting from those activities constitute self-employment income and are subject to the self-employment tax.

According to the IRS, mined currency is taxable income. If you’re a Masternode owner, any incentives paid to you are included. All in all, if you’re mining any virtual currency, and not on behalf of an employer, you’re considered self-employed, and need to pay tax.

Exchange

Notice 2014-21 A-6: If the fair market value of property received in exchange for virtual currency exceeds the taxpayer's adjusted basis of the virtual currency, the taxpayer has taxable gain.

Depending on a number of factors, any exchange of Dash into another currency may be taxable.

All of these are identified by NODE40 in your blockchain and processed automatically.