Income Tax 2022: How to declare bitcoin and other cryptocurrencies step by step

With less than a month to go until the delivery of the 2022 income tax return, which includes your crypto assets, we are still seeing many investors desperate for the best way to file returns.

With that in mind, we’ve put together a quick step-by-step guide to give you a guide on how to proceed when declaring your crypto assets.

• Download and install the Declaration Generator Program (download here†
• Prepare the documents: you must have all income reports from companies and financial institutions that generated or used income from 01/01/2021 to 31/12/21. With regard to cryptocurrency operations, ask the exchanges you have used in the year for their transaction history. If you didn’t use Exchange, try listing the explorer transactions for the network used.
• Also download and install the Capital Gains Calculation Program (gcap) – you will use it to declare cryptocurrencies.
• For the conventional part of the declaration, proceed as in previous years and fill in:

Identification: your registration information.

Income: all income received in the prior year and previously reported by paying sources, including financial institutions.

Assets and rights† applications, bank balances, investments, movable and immovable property. Everything in reais, with their respective values ​​in the previous year, in the column 2020 (take this data from the previous year’s declaration) and at the end in 2021.

Payments made† the expenses incurred, the deductible and non-deductible, and which can be proven, notify the CNPJ or CPF of the institutions or professionals.

Debts and real liens: debts and debts for which the taxpayer has paid in the previous year or still had debts on 31-12-21.

• To declare Bitcoin and other cryptocurrencies:

Here you need some extra information, here we go:

In Assets and Rights:

When

When the purchase value of any type of crypto asset is equal to or greater than BRL 5,000.00 (Five Thousand Reais).

How

They must be declared in the Asset and Rights File according to the classification below and considered at acquisition price, never on the basis of the listing on December 31.

Group 8 of the aforementioned form, codes below, specified species, quantity and where it is held (company name at CNPJ or own custody).

And within the Group the codes below:

Code 01 – Bitcoin Cryptocurrency – BTC

Code 02 – Other cryptocurrencies, also known as altcoins.

Code 03 – Stablecoins

Code 10 – NFTs (non-replaceable tokens)

Code 99 – Other crypto assets not included in codes 1, 2, 3 or 10.

in income

Exempt income and non-taxable: The profit obtained when the sum of the sales of the month is less than R$35,000.00 must be reported in item 05 of this form.

Income excluding tax: taxable profits, that is, in the months when the sum of sales exceeds R$35,000.00, the profits must be calculated through the capital gains calculation program and then transferred to the income tax program. †

Please note that in income tax 2022, the capital gains calculation program to be used is GCAP2021.

After the steps above, yes, then you are ready to correct the outstanding issues generated during the completion and check after the delivery is completed.

Do not forget to check the processing of your declaration via the e-CAC (Virtual Taxpayer Assistance Center) in the days after delivery.

And if you are still unsure about how to declare bitcoin and other cryptocurrencies, use all the free help available with declaring Bitcoin.

Use our free worksheet.

Download our eBook.

How to know more details about all this? Download the free ebook “HOW TO APPLY BITCOIN INCOME TAX”, click here.

This book was written by us in collaboration with Mercado Bitcoin, reflecting on your issues and bringing you everything you need to know about cryptocurrency taxation. If this content helped you, please like and share! Come with us!