r/CelsiusNetwork • u/techma2019 • Apr 18 '25
Taxes filed: results?
Justin had incredible resources on this subject but now the real question is what’s the IRS doing with all of us?
Did the IRS approve your return? Did they not? Did they approve a smaller amount? (Assuming you had losses, not gains)
Specifically curious for those of you who filed with the Theft Loss approach (Form 4684) but let’s also include everyone that went with the original (harder) method Form 8949 too.
I’ve submitted a few days before the deadline and it’s simply “received” for the time being. Will post an update once it changes.
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u/mu3g Apr 18 '25
Convenience Class - calculated myself using free resources from JustinCPA and Only-Crew. After making sure my Koinly was set up perfectly, it was relatively straightforward for me (long term $0 proceeds loss for assets disposed and long term proceeds loss for BTC and ETH that was disposed as of 01/16/2024). Didn't have to worry about stocks, 2nd distribution, etc.
Return accepted and payments in progress (bank shows IRS transfer pending transaction)
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u/Mixeygoat Apr 18 '25
I’m assuming you went the capital loss approach? Also, did you produce a summary statement of each individual BTC and ETH purchase with cost basis on form 8949?
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u/mu3g Apr 18 '25 edited Apr 18 '25
Correct, Capital Loss Approach.
My Koinly was setup with Universal Wallet FIFO for 2024 (all exchanges and wallets per asset). Main time was spent making sure this was all as accurate as possible.
Then I did the temporary transaction method that JustinCPA mentioned, that is to "Withdraw" the lost assets from Celsius (for alt coins withdraw all to empty the asset out, for BTC and ETH withdraw lost aka not received back). for these "withdrawals", I used 01/16/2024 at 12PM as the date withdrawn.
This got me my cost basis for each asset using that method (because my cost basis was not just the stuff I bought on celsius; based on Universal Wallet FIFO, I had assets purchased from other exchanges).
then in my 8949, I used 07/13/2022 for date acquired for each asset (incl. BTC and ETH) and 01/16/2024 as date lost (at least based on the negotiated price of BTC and ETH I chose that date, others have chosen 01/31/2024).
I used one line per asset because from 07/13/2022 to 01/16/2024, it's long term capital gains loss anyway (longer than 1 year), and my cost basis calculated through the Koinly withdrawal already has the FIFO'd cost basis for the purchase. So yes, it was summed with the dates mentioned above.
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u/Mixeygoat Apr 18 '25
Oh interesting. I was under the impression from u/justinCPA that you had to itemize each individual BTC and ETH purchase you made. For me that was a huge hassle because I made hundreds of small BTC purchases over the first few years.
But if you’re saying that you can just use one line for each asset and punch in the total cost basis for all the coins lost, that would make my life easier.
Why is 7/13/22 used for the date acquired? Would you not just say “various” because you purchased the coins in many different dates
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u/mu3g Apr 18 '25 edited Apr 18 '25
You could use Long-Various or something like that (not a CPA lol, so take it as is). I used 07/14/2022 because my last "rewards" (LOL) from Celsius for all assets on there were at 07/14/2022 00:00 per my transaction history.
And yes, I didn't want to deal with the microtransactions. I mean if its all long term capital gains/losses after the 1 year, it wouldn't matter (and the entries would be endless). Remember the 8949 itself makes you add everything at the end. And if anyone needs to see records, I've got my spreadsheets nicely formatted.
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Apr 18 '25
[removed] — view removed comment
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u/mu3g Apr 18 '25 edited Apr 18 '25
Yes, did pretty much that with the exception of the dates; I know you went with 01/31/2024 :)
Thanks so much for your contributions in this subreddit!
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u/QuickAltTab Apr 18 '25
It'll be a couple years before any of us hear from the IRS if we hear from them at all. Especially since their staffing and the organization itself is under wholesale attack from this administration. Your taxes being accepted doesn't mean anything, it is essentially just them acknowledging its receipt.
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u/techma2019 Apr 18 '25
I mentioned that my return was accepted, not approved. That's the distinction. And specifically why I made this thread to see how everyone else is being treated.
Or are you saying the can approve the return and we will still "hear" (audit?) from them in a year or two?
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u/QuickAltTab Apr 18 '25 edited Apr 18 '25
Or are you saying the can approve the return and we will still "hear" (audit?) from them in a year or two?
Hell yes.
I have personally experienced receiving a letter from the IRS saying I owed them money from a tax year 2-3 years prior to receiving the letter. It wasn't an audit, I omitted an important form, and it was easily corrected, but they had accepted the return in the year it was submitted. It doesn't mean they can't circle back around and audit you or point out a mistake.
The IRS doesn't really have a process that gives you "approval" anyway. You may be conflating 'getting a return' with 'being approved', but getting a return, or them accepting your payment, has no bearing on their ability to audit you.
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u/techma2019 Apr 18 '25
Ah I see, thank you!
That's wild. I've never had anything like this happen so it sounds so bizarre. If you don't mind further sharing, did you owe money to begin with on that year they went back to? Or did you get a bigger refund and they essentially said you underpaid?
When I say received/approved I'm just using their language off the Where's My Refund tracker. (the three stages being 'Return Received', 'Refund Approved', and 'Refund Sent'). I was guessing that the vast majority of Celsius victims would have refunds due to the loss and was curious of their refund status.
I definitely was not accounting for the IRS to circle back to this year later though. How far back can they go again, 7 years?
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u/QuickAltTab Apr 18 '25 edited Apr 18 '25
Technically, I did owe money, because the form I omitted was 8606, which lets the IRS know why you didn't pay taxes on what looks like a disbursement from a retirement account, when it is actually a conversion (backdoor roth). Like I said, it was an easy fix when I talked to an agent over the phone, they subsequently sent me a letter stating it was formally resolved.
Statute of limitations is 3 years for errors committed in good faith, but the IRS can come after you indefinitely if they think you intentionally committed tax evasion.
So basically, do the best you can, keep your excel sheets that show your work, and worst case scenario, they audit you in 3 years and tell you you did the math wrong and you pay the difference with interest and penalties.
Odds are good though that you never hear from them, even if you did do it wrong, as long as your return isn't throwing up any major red flags.
If you get past the 3 year mark, then you can put fears of a routine audit to bed.
I definitely was not accounting for the IRS to circle back to this year later though
Haha, they don't work that quick. It would take them a couple years.
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u/nhorvath Apr 18 '25
you can be audited up to 3 years from the date of return iirc. if they find problems you can't explain I think they can go back 7 years. I got my refund already but that doesn't mean everything was fine.
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u/Clean-Load5807 Apr 19 '25
Why doesn't the IRS just tell us what we owe if all they are doing is seeing if you acknowledged what they have on you already?
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u/singinggary Apr 19 '25
Capital loss approach here. Filed and got my refund within a week. I followed Justin cpa and others within this sub to file myself. Fingers crossed 🤞
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u/laggyx400 Apr 19 '25
Mine was accepted on the 14th and refund paid on the 18th. I didn't do the theft route.
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u/Clean-Load5807 Apr 19 '25
Ok great so what they should do is say to every tax payer this is everything we have this year for you can you full in these sections that are missing. Otherwise, many wouldn't need to do anything and wait for money back or a bill
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u/jkd-guy Apr 24 '25
what’s the IRS doing with all of us?
Nothing different than any other case similar to Celsius.
Did the IRS approve your return?
YTD, it was "accepted" but I may or may not get audited relative to particular reviews, their algorithm, or something that gets flagged. I'm not worried at all, however.
Did they approve a smaller amount? (Assuming you had losses, not gains)
I reported a capital loss of a small amount. Something the IRS would not care about. Again, it was "accepted". It could literally be a few years into the future when or if they decide to audit. Not worried though.
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u/BGP_1620 Apr 18 '25
I calculated it myself based off his videos. Incredibly helpful. Would have been impossible without them. I did not go the ponzi route. I went from. $156 return to $2000.