Do I have to revise my previous tax years?

Hello ZenLedger,

thank you for starting this community - very helpful! I just prepared my tax year 2019 with ZenLedger, my question is: do I have to revise my previous tax returns? I owned crypto in 2017 and 2018 but didn’t sell any. However I might have had some airdrops. What do you recommend!

Hi Susan, welcome to the ZenLedger community!

Great questions - here’s some guidance.

If all you did in 2017 and 2018 is BUY with fiat currency (such as US Dollars) and hold or transfer to wallets, then you would not have had any taxable events in those years for your cryptocurrency holdings. Sales and Trades are, in most cases, taxable events according to current guidance from the IRS, but buying with fiat and holding are not taxable events.

If you TRADED one coin for another (such as buying ETH with BTC), you would have had a taxable event and it would be a good idea to refile your return. Receiving airdrops is not taxable either, unless you sell the airdropped coins. Read more about the current guidance on taxable implications of cryptocurrency here: How will Cryptocurrency Investments affect my taxes?

With ZenLedger, the information you imported to produce your 2019 tax report should also be good to refile any other year - you’d just pay for the reports for that year.

Please let me know if you have any more questions, and welcome to the community!

Hi Rebecca,

this is super helpful! I found this article on your blog about hard forks: about the new regulation on hard forks. In 2018 I had one and I did get some units of new cryptocurrency. But I believe since it was 2018 (before the new regulation was adopted), I don’t have to refile my taxes, right?

Thank you for your great help!

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Hi @Susan ! Good question. I would definitely defer to your CPA on this guidance, but this part is of particular interest in your situation:

" Revenue Ruling 2019 – 24 covers the tax status and treatment of cryptocurrency hard forks. It defines such terms as “hard fork”, airdrop”, and explains different situations where taxpayers do or do not have gross income as a result of an airdrop following a hard work. The rule is pretty simple: if a taxpayer does not receive crypto units as a result of a hard fork, he/she does not have gross income. On the opposite side, if as a result of an airdrop following a hard fork you get units of new cryptocurrency, you do have gross income."

Because of this, you may have some unstated income. It would be wise to chat with your CPA on this point to see whether you must re-file your past tax return.

Let us know if you have any further comments or questions!

Hi Rebecca,

thanks for your help! After speaking with my CPA, she recommended that I revise my tax year 2018, because she said it might help me save some money and hopefully even get cash back! Actually I invited her directly to my account with “Add your CPA” button - super easy. She actually loved the tool and will recommend it to her other clients. Ok, I will go ahead and purchase 2018.
I wish you have a great day!