Anyone familair with cryptocurrency trading and 8938 reporting?

[Just-Lisa-Now-]

Ive only got one client that's trading in cryptocurrency...he sent me the 8949 from his Cointracker account, and we reported his losses on his tax return a couple of weeks ago...he just called and says he thinks he may need to file the 8938 since some of these trades are with foreign currency.

I cant tell by the Cointracker paperwork what's foreign and what's not...what is it I need him to get me in order to determine if he needs to file the 8938?

[itonewbie · Accepted solution]

Cointracker is only a service for tracking cryptocurrency transactions from what I gathered.  The underlying assets may well be held and traded through foreign financial institutions and could be subject to reporting depending on whether the total values of these assets met the threshold for your client's filing status and depending on whether your client resides in or outside the US.

You will need to find out from your client where the cryptocurrencies were held during the year, the total values of all the reportable specified foreign financial assets (that would include asset types other than cryptocurrencies), and determine if that exceeded the threshold for reporting.

Even if your client does not have a reporting requirement for FATCA, you should also review whether FBAR would need to be filed if the cryptocurrencies are held in foreign financial accounts over which your client has either signatory authority or in which your client has a financial interest.

[G Garcia]

If the client used Coinbase and got only cash out $5000 last year is it short term capital gain? Does He need to report the names of each crypto currency trade it? And what forms he needs to fill up for his taxes 2020? Thanks