Crypto Tax Preparation in Virginia
Every Exchange. Every Wallet.
Every Chain. Done Right.
The IRS has made cryptocurrency reporting a stated enforcement priority. Every sale, trade, exchange, and in many cases every use of a digital asset is a taxable event. The penalties for non-compliance - including failure to check the crypto question on Form 1040 - can be significant.
Most crypto holders don’t report correctly. Most general preparers don’t know what to look for. Both of those facts are now an IRS problem - and potentially yours.
Check “No” or leave it blank - triggering an automatic IRS flag and potential penalties before they even look at your return
Answer correctly, document completely, and file a return that’s accurate and defensible - every exchange, every wallet, every chain
At Griffin & Johnson, we handle crypto tax preparation for clients ranging from occasional investors to active DeFi participants and multi-wallet traders. We work with your full transaction history - every exchange, every wallet, every chain - and produce a return that is accurate, complete, and defensible if the IRS ever asks a question about it.
Since 2019, the IRS has placed the crypto compliance question at the top of Form 1040 - before any income is reported. Answering "No" when you had taxable crypto activity is a false statement on a federal tax return. The IRS receives 1099s from Coinbase, Kraken, and other major exchanges, and cross-references them against reported activity. The gap between what exchanges report and what returns show is exactly what triggers notices.
Crypto Tax Preparation
in Virginia Requires Knowledge
Most Preparers Don't Have.
Crypto is not a line on a form. It is a set of overlapping tax rules - capital gains treatment, ordinary income treatment, self-employment exposure, and international reporting requirements - that interact differently depending on how you acquired, used, and disposed of your digital assets. Most general tax preparers encounter crypto once or twice a year. Most tax software reduces it to a simple import that misses more than it captures. Here's what goes wrong consistently:
Crypto-to-crypto trades weren't reported at all
Trading one crypto for another - like Bitcoin for Ethereum - is a taxable event. The IRS treats it as selling the first coin at its current value. Most people assume you only owe taxes when you cash out to dollars. The IRS disagrees, and exchanges now report these trades.
Cost basis was calculated wrong - or guessed
Your tax on a crypto sale is based on what you originally paid for it. If you bought the same coin multiple times at different prices across different exchanges, calculating that correctly takes real work. We apply the right method consistently across your full transaction history.
Staking and yield farming rewards weren't reported as income
Staking rewards, yield farming income, and liquidity pool payouts are taxable as regular income the moment you receive them - based on their value that day. That value also becomes your starting cost for future sales. Skipping this step creates both unreported income and errors on future returns.
NFT transactions were treated as collectibles or ignored
Selling an NFT triggers a capital gains tax. Creating and selling NFTs or earning royalties is treated as regular income. Gas fees affect your cost basis. Most returns lump all of this together - or ignore it entirely. We break it out correctly.
Foreign exchange holdings weren't disclosed
Crypto held on foreign exchanges may require special IRS reporting. The penalties for not reporting can be $10,000 or more per account, per year - and willful non-disclosure can lead to criminal charges. We identify whether you have a reporting requirement and handle it correctly.
Prior years weren't filed - and the exposure is growing
The IRS can assess tax on unreported crypto income for open tax years. With crypto's price appreciation cycles, the unreported gain on prior years can be substantial. Voluntary disclosure - done correctly, before the IRS makes contact - is significantly better than waiting for a notice that triggers an audit.
An accurate crypto return isn't about being aggressive. It's about being correct.
Every problem above creates either an understated tax liability or an overstated one. Both are problems - one creates IRS exposure, the other costs money you didn't owe. At Griffin & Johnson, we work through your complete transaction history across every exchange and wallet, apply the correct tax treatment to every event type, and produce a return that accurately reflects your crypto activity - nothing missing, nothing inflated.
Every Action With
Your Crypto That
The IRS Cares About
The most dangerous assumption in crypto taxation is that only cashing out creates a tax event. The IRS treats digital assets as property - meaning every disposition, at any value, in any form, is a taxable transaction. Here is what that means in practice for the most common crypto activities.
🔗 Non-custodial wallets and DEX transactions are not exempt. The fact that Uniswap, dYdX, or a hardware wallet doesn't send you a 1099 doesn't change the tax treatment of transactions on those platforms. The obligation exists regardless of whether you received a form. We track and report these transactions correctly - not just the ones with documentation.
Occasional Investor to
Active DeFi Participant -
Every Crypto Situation Covered
Crypto Tax Preparation is not one-size-fits-all. The tax treatment of a long-term Bitcoin holder is entirely different from an active DeFi participant or an NFT creator - and the complexity scales with your activity. We handle the full spectrum.
Bitcoin and Ethereum investors - buy, hold, sell
Even straightforward buy-and-hold investors need accurate cost basis tracking across purchases, the correct holding period analysis, and properly completed Form 8949 and Schedule D. Our Crypto Tax Preparation ensures nothing is missed.
Active traders with high-volume transaction histories
Hundreds or thousands of transactions require automated reconciliation tools, consistent basis methodology, and a preparer who reviews the output rather than just importing it and clicking submit.
DeFi participants - liquidity pools, yield farming, lending
Every DeFi interaction is a potential taxable event. Liquidity pool entry and exit, token swaps, lending and borrowing, and wrapped token conversions require transaction-level analysis that goes far beyond a standard import.
NFT creators and collectors
Creation income, sale gains, royalty streams, and gas fees - NFT activity creates multiple concurrent income types that require specific tax treatment and careful documentation.
Staking and mining income recipients
Staking rewards and mining income are reported as ordinary income at receipt - and the value at receipt becomes the cost basis for future sales. Getting both right is essential for accurate multi-year reporting.
Clients who received crypto as compensation
Crypto received as payment for services - whether as a W-2 employee or an independent contractor - is ordinary income at fair market value on the date received. The compensation and the future sale are two separate tax events.
Multi-exchange and multi-wallet investors
Coinbase, Kraken, Binance, MetaMask, Ledger - each platform tracks only its own activity. Consolidating cost basis across all of them requires reconciliation that software alone cannot do reliably without human review.
Clients with prior-year unreported crypto activity
Voluntary disclosure before IRS contact is significantly better than responding to a notice. Our Crypto Tax Preparation team handles amended returns and delinquent filings, advising on the best approach given your specific history and exposure.
International crypto holders & foreign exchange users
Crypto held on foreign exchanges - Binance International, Kraken, OKX - may trigger FBAR filing requirements and FATCA reporting on Form 8938. The thresholds are specific, the penalties for non-disclosure are severe, and most general preparers miss them entirely.
Every Crypto Tax Situation,
Handled Completely
From a simple annual Bitcoin sale to a complex multi-chain DeFi history, our Crypto Tax Preparation covers every component in one engagement - with a preparer who understands what each transaction type means and how it interacts with your overall return. We prepare the complete picture, with one preparer who maintains your records year over year.
Capital Gains Reporting
Accurate calculation of short-term and long-term gains from every sale, trade, and disposition - applying the correct methodology and producing Form 8949 and Schedule D that match your transaction history exactly.
- ✓FIFO, LIFO, and specific identification methods
- ✓Short-term vs. long-term holding period analysis
- ✓Exchange-to-exchange trades as taxable events
- ✓Form 8949 and Schedule D preparation
Cost Basis Tracking
Accurate basis is the foundation of every correct crypto return. We reconcile your transaction history across every exchange and wallet - including transfers between them - and establish defensible basis for every holding.
- ✓Multi-exchange cost basis reconciliation
- ✓Wallet-to-wallet transfer tracking
- ✓Lost or stolen crypto documentation
- ✓Hard fork and airdrop basis determination
Staking & Mining Income
Staking rewards and mining income are ordinary income when received - and the receipt date value becomes the cost basis for future dispositions. We report both correctly and maintain the basis records for future years.
- ✓Staking reward income reporting
- ✓Mining income - ordinary or self-employment
- ✓Proof-of-stake vs. proof-of-work treatment
- ✓Node operator income
DeFi & NFT Transactions
DeFi and NFT transactions require transaction-level analysis that no import tool handles reliably. We review each event type, apply the correct treatment, and produce a defensible return that reflects the complexity of your on-chain activity.
- ✓Liquidity pool entry and exit events
- ✓Yield farming and lending income
- ✓NFT sale, creation, and royalty income
- ✓Wrapped token and bridge transactions
Crypto as Compensation
Crypto received as payment for services is ordinary income at receipt - whether you're an employee or a contractor. The compensation event and the future sale event are tracked separately and reported on different forms.
- ✓Employee crypto compensation (W-2)
- ✓Contractor crypto payment (1099)
- ✓Token vesting schedules
- ✓Basis establishment for future sales
FBAR & International Reporting
Crypto held on foreign exchanges may require FBAR filing and Form 8938 FATCA reporting. We analyze your foreign exchange holdings, determine reporting requirements, and handle the filings - including penalty abatement for prior non-compliance where applicable.
- ✓Foreign exchange FBAR analysis
- ✓Form 8938 (FATCA) reporting
- ✓Foreign crypto account disclosure
- ✓Penalty abatement for prior non-compliance
Didn't Report Crypto
in Prior Years? Here's
What to Do About It.
The IRS has significantly expanded its crypto enforcement capabilities since 2019. It receives transaction data from major exchanges, uses blockchain analytics firms to trace wallet activity, and has sent targeted notices to thousands of taxpayers whose reported activity doesn't match exchange records.
Voluntary disclosure - taking action before the IRS contacts you - is always a better position than responding to a notice or audit. It demonstrates good-faith compliance, limits exposure to willful penalties, and gives you control over how the situation is resolved. Waiting to see if the IRS notices is a strategy with a worsening risk profile every year.
We handle prior-year crypto amendments and delinquent filings. We assess your exposure, identify the correct approach, and prepare returns that are accurate and defensible - giving you a documented record of compliance rather than a continuing gap.
Amended returns (Form 1040-X)
We prepare amended returns for prior years, calculate the correct tax with any applicable interest, and submit a clean, complete correction. The IRS allows amendments for up to three years back on most returns.
Delinquent filing strategy
Multiple years of unfiled or incorrectly filed returns require a coordinated approach. We assess the full exposure, prioritize the filing sequence, and produce returns that close the gap systematically - not in a way that creates new problems.
IRS notice response and representation
An IRS notice about crypto activity requires an immediate, documented response. We handle correspondence, represent you in the resolution, and produce the transaction-level documentation the IRS is asking for.
Straight Answers
to the Questions
You're Already Asking
No jargon. No runaround. What you actually need to know before you decide.
Start Your Intake.
We Handle the Rest.
No surprise fees. No bulk processing. Submit your intake form and we'll reach out within one business day. Every transaction type handled correctly - from your first Bitcoin purchase to your most complex DeFi history.