Every once in a while I write an email to a client that I consider so darn brilliant that I need to post it to my blog. This one was to a client who is doing a lot of cross-exchange arbitrage, and was concerned about his tax exposure. I helped guide him through that issue (he actually did his own taxes). Then I dropped the bomb that he might have FBAR or FATCA reporting requirements if he is holding large amounts of crypto on foreign-based exchanges, and should also be sure to start making estimated tax payments. Hilarity ensued! We join the conversation mid stream….
FBAR/FATCA? Yes it’s separate. Here is a table that summarizes the requirements for filing.
The key question you need to ask yourself is if you own any foreign assets. In the case of FBAR this would include combined foreign bank accounts, trading accounts, etc. that exceed $10K at any point during the year. So consider if any of the exchanges you were trading on are foreign-based, and whether your balances (combined) exceeded $10K for the year. For FATCA the definition of assets is broader, and the threshholds are much higher.
Re: estimated taxes, TT (ed. note: TurboTax) should have asked you if you want to generate vouchers for the quarterly payments. Note that the first will be due by April 17. Also, the IRS will probably follow up with you after your 2017 is processed and penalize you for not making quarterly estimated payments in 2017. Note that Form 2210 can be used to calculate your penalty.
Also, the same situation will apply to the state.