Cryptocurrency Tax in NYC
What We Handle
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Capital Gains Reporting — Every sale, swap, or spend of cryptocurrency is a taxable event. We reconcile your exchange data, calculate cost basis using specific identification (when available) or FIFO, and report everything on Form 8949 and Schedule D.
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DeFi Income & Staking — Yield farming, liquidity pool rewards, staking income, and airdrops are all taxable as ordinary income when received. We track the fair market value at the time of receipt and report it properly.
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NFT Sales & Collectibles — NFTs sold at a profit trigger capital gains tax. The IRS has indicated that certain NFTs may be treated as collectibles, subject to a higher 28% federal rate. We analyze each transaction and apply the correct treatment.
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Exchange Data Reconciliation — If you’ve traded on Coinbase, Kraken, Binance, or decentralized exchanges, we pull the transaction history, reconcile transfers between wallets, and build a complete picture of your activity for the year.
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Tax-Loss Harvesting — Crypto isn’t subject to the wash sale rule (yet). That means you can sell a position at a loss and buy it back immediately to lock in the loss for tax purposes. We identify these opportunities throughout the year.
Crypto Taxes Hit Harder in New York
A short-term crypto gain in New York City gets taxed at your ordinary income rate across all three levels: federal (up to 37%), state (up to 10.9%), and city (up to 3.876%). That’s a combined marginal rate north of 50% for high earners. Even long-term gains face a meaningful bite once you stack the 20% federal rate, the 3.8% net investment income tax, and the state and city layers.
The reporting side is where most people run into trouble. Someone who swapped ETH for a token, provided liquidity, earned yield, and then sold the LP tokens has triggered multiple taxable events — and most exchange-generated 1099s don’t capture the full picture. We use crypto tax software alongside manual review to make sure nothing is missed and nothing is double-counted.
One thing worth knowing: the IRS now requires every taxpayer to answer the digital asset question on the front of Form 1040. Checking “no” when you traded crypto is a misrepresentation on a federal return. If you’ve been ignoring crypto on prior returns, we can help you correct the record before the IRS sends a notice based on the 1099 data they’re now receiving from exchanges.
Sources & References
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Ready to Get Started?
Send us your exchange history and we’ll sort out the reporting. The sooner we start, the cleaner the return.