I have some USDC and BTC on Celsius along with Coinbase, Hodlnaut etc. I do move some coins around so I have imported all the exchanges/wallets into Koinly, including Celsius. However, Celsius sent me a 1099-MISC for USDC and BTC interest earned. I think Koinly is also showing this as income in my Turbotax report. How can I avoid being taxed twice since I do have to enter 1099-MISC into TurboTax since these are being reported to IRS and if I remove Celsius as wallet/exchange from Koinly, the reporting gets all confused when it comes to in and out transfers to other exchanges from Celsius?
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use koinly as it keeps track of the correct cost basis. celsius interest is correctly captured by koinly (almost as mine was off by 4$ lol) so you can record this in other income section of turbo tax. create a separate header/section for each of the other income categories for easier tracking. you can label other income from celsius as “celsius - interest earned”. Delete the 1099-misc if u already entered it in turbo tax else u will be taxed twice.
wouldn’t this create a problem on the other end? 1099s are submitted to the IRS by entities like Celsius and matched up when filings are submitted based on SSN or EIN. If someone in this situation (myself included) deletes the 1099s in our tax filing to account for the interest already being counted in the transactions/report from Koinly, it would most certainly trigger the IRS for failure to report the 1099 amount submitted by Celsius.
Chugsteruno you mention tagging the other income into separate sections. where are you doing this? trying to get clarification.
i have the 1099 misc entered in the other income for TTax but its been said koinly is already counting this. so that means I will be double taxed on the reported interest.
I am in the same boat, with Celsius. They sent me 2 1099s for interest and I am seeing the interest also reported in Koinly transactions so they must be making the auto-gen report from Koinly. Chugsteruno’s solution is one I guess, but I am pretty certain 1099s sent to IRS do so with a SSN or EIN attached to them.
I moved stuff in and out of Celsius based on market conditions. Not account for those in and outs in Koinly I imagine would create mismatches?
Thats why i tagged the other income into separate sections and one section has “celsius other income EIN :xxxxx” so the numbers should match on IRS end and the header says celsius with their EIN mentioned .
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If u delete it from koinly u will get messed up on cost basis for transactions in and out from celsius so not advisable to delete.
I received 2 1099-MISC from Celsius. Input them both as you would anytime you get 1099s, take the total of said 1099s, subtract that amount from the income you’re inputting from Koinly. No need to remove the wallet from Koinly and no double taxing this way.
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The only caveat there is if we get an audit on other income reported then the numbers reported by the koinly income report wont match the ones u entered in turbo tax as you tweaked it to subtract the amount reported by the 1099-misc
It would be far easier explaining the difference there, if you even had to, rather than excluding a 1099 which the IRS does get a copy of. You do not want to exclude the 1099s from your tax return. The Koinly report is for our ease and convenience instead of having to create your own excel sheet or other form for tracking income.
How do you suggest doing that? I tried uploading an edited CSV document - in which I meticulously amended the proceeds by asset, taking out the amounts received as income and reported on BlockFi, Crypto.com and the two Celsius 1099’s - Turbotax told me that this document could not be read. (I am assuming there is some kind of hash in the document to prevent this?).
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Just plug in the income amount from Koinly, minus the income you’re already including from the 1099s into the miscellaneous income section I think it’s called. The income from Koinly isn’t imported into TurboTax, only capital gains. You have to manually type in the income, so there’s nothing you need to edit in that regard, other than subtracting the 1099s.
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