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Texas takes nothing off a crypto gain, and Austin has become the destination for equity-heavy Californians who want to keep it that way. The FTB audits exactly those moves. Establishing Texas residency before disposing of appreciated lots, and proving it per lot, is the highest-leverage tax decision an Austin transplant makes.
Austin crypto investors pay zero state income tax, and a California transplant who establishes Texas residency before disposing of appreciated lots keeps up to 13.3% more of every gain, $66,500 on a $500,000 sale. The Franchise Tax Board audits exactly that timeline. Count On Sheep, a USA-based team with former Big 4 leadership, rebuilds wallet, exchange, mining, and DeFi history into CPA-ready Form 8949, Schedule D, and Schedule 1 inputs for Austin investors, with the per-lot dates that make a Texas move defensible. We do not file. Your CPA files, or you file with TurboTax.
Phone: (858) 434-7547
Before you file yourself or hand anything to a CPA, the crypto activity has to be reconciled. That is how Austin investors avoid duplicate disposals, unsupported basis, overstated gains, and preventable tax. Clean records improve accuracy, preserve legitimate deductions and losses, and let you reconcile each 1099-DA against the complete transaction history.
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Austin sits at the intersection of three crypto profiles: California transplants with appreciated portfolios, tech workers holding equity plus crypto, and one of the largest bitcoin mining corridors in North America an hour up the road.
The migration is the headline. Tesla moved its headquarters to Austin in 2021, and the broader tech relocation brought thousands of households from California carrying RSUs, startup equity, and appreciated crypto lots. For them, the Texas math only pays off if the ledger proves the timeline: what was sold as a Californian stays California taxable, and the FTB checks.
Bitcoin-native business is the second profile. Riot Platforms runs one of the continent's largest mining facilities in Rockdale, Core Scientific is headquartered in Austin, and Unchained built its bitcoin financial services business here. Mining operations need daily reward streams reconstructed at fair market value, with clean data feeding Schedule C, depreciation, and power cost decisions made by the CPA.
The founder scene rounds it out. CoinDesk's Consensus conference ran in Austin from 2022 through 2024, and the city's startups pay contributors in tokens with vesting schedules and lockups. Add the multi-year backlogs most transplants carry from their California years, and Austin generates some of the most varied crypto tax work we see anywhere.
Whatever the profile, the deliverable is identical: per-lot Form 8949 detail, Schedule D totals, Schedule 1 or Schedule C inputs for mining and staking, and workpapers behind every number. An Austin CPA files from it directly, or you drop the totals into TurboTax. For transplants, the package includes the disposal timeline against the move date, which is the document the FTB conversation eventually comes down to.
Austin residents pay no state or city income tax on crypto. The Texas constitution bans a personal income tax, so the only layer is federal: up to 20% long-term plus the 3.8% net investment income tax, or ordinary rates up to 37% plus NIIT for short-term gains, staking, and mining.
| City | State + local tax | Federal (LTCG + NIIT) | Total tax | Extra cost vs Austin |
|---|---|---|---|---|
| Austin | $0 | $119,000 (23.8%) | $119,000 | Baseline |
| San Francisco | $66,500 (13.3%) | $119,000 (23.8%) | $185,500 | +$66,500 |
| New York City | $73,880 (14.776%) | $119,000 (23.8%) | $192,880 | +$73,880 |
Illustrative math at top marginal rates. Federal assumes the 20% long-term rate plus 3.8% net investment income tax. A California resident who sells before establishing Texas residency still owes California tax on the gain. The savings apply to disposals after the move, and the FTB audits the timeline.
No state income tax means no conformity question. Federal property treatment applies in full: per-lot basis, the digital asset question on Form 1040, and 1099-DA broker reporting from the 2025 tax year.
What this means in practice: the entire tax outcome for an Austin investor rides on the federal layer and, for transplants, on the move timeline. Long-term versus short-term treatment is worth up to 17 percentage points federally, and selling on the right side of a Texas move is worth up to 13.3% more. Both are questions of documentation, not argument, and both are answered by the same per-lot ledger we deliver.
Austin needs the deepest city rewrite because its prior page shared the most language with Houston. The new content is centered on startup and protocol work, compensation, mining, business receipts, and self-custody evidence rather than generic Texas phrases.
The blockchain can show when tokens reached a wallet, but it may not show whether they were purchased, earned, vested, restricted, distributed by an entity, or held for someone else. Purchase agreements, compensation documents, vesting schedules, payroll records, and valuations explain the transfer.
We connect those documents to the wallet history and later disposals. Your CPA or attorney determines the controlling tax treatment and any election or entity consequence.
A contributor may receive stablecoins, governance tokens, NFTs, or streamed payments from several communities. Each receipt needs date, quantity, dollar value, payer context, and wallet destination. A later sale is a second event measured from the basis created at receipt.
We reconstruct the receipt stream and later activity. Invoices, contracts, expenses, self-employment status, and business deductions remain with the taxpayer and CPA.
An Austin founder may control personal wallets, a company multisig, protocol treasury, investment entity, and customer-payment wallet. Control of the keys does not establish common tax ownership.
The engagement begins with a wallet ownership map. Transfers among different owners remain visible for CPA classification; transfers among wallets of the same owner preserve lot history when the evidence supports that conclusion.
Collateral deposits, borrowings, repayments, liquidations, receipt tokens, and rewards can look like ordinary token transfers in raw data. Whether an event is a loan, exchange, income receipt, or disposal depends on the protocol and the taxpayer’s facts.
We map the complete position lifecycle and document the applied classification. Protocol terms, liquidation notices, and legal analysis can require CPA or attorney judgment.
Assume a developer earns a token stream over six months, moves receipts to self-custody, swaps some tokens, and contributes others to a liquidity pool. A year-end balance does not establish the receipt values or the basis of the later events.
Reconciliation records each receipt, connects transfers, identifies later disposals, and preserves remaining lots. The output separates income inputs from Form 8949 transactions for the return preparer.
Texas mining and validation activity can create thousands of receipts before assets are consolidated or sold. Pool statements, node records, wallet timestamps, and supported dollar pricing are needed to avoid duplicate income and missing basis.
We reconstruct rewards and later disposals. Equipment, electricity, depreciation, payroll, entity, and franchise-tax questions remain part of the CPA and bookkeeping work.
First, the business records revenue or another receipt based on the transaction facts. Second, holding and later disposing of the asset can create a gain or loss from the established basis. Reporting only the bank cash-out omits the first checkpoint.
We connect invoices, wallet deposits, conversions, fees, and off-ramps where records are supplied. The company’s books remain the source for customer, expense, and entity information.
Count On Sheep serves Austin clients remotely. Meetings are held by video conference, so a reconciliation can start the week it is scoped instead of waiting on travel or a downtown office visit.
There is no permanent Austin office, staffed branch, or mailing address, and this page does not create an Austin LocalBusiness entity. The only LocalBusiness entity is the San Diego headquarters.
An Austin investor can sell tokens at one broker after acquiring them through compensation, a prior exchange, or self-custody. The selling broker may report proceeds without knowing the original purchase or income value that established basis.
We connect the source documents and transaction chain, then produce the supported Form 8949 inputs and adjustment trail. The CPA reviews the broker-to-return reconciliation before filing.
A founder may end the year with personal tokens, vested and unvested rights, company treasury assets, and protocol positions. The tax inventory should list only assets owned by the taxpayer or scoped entity, with custody, quantity, basis, and acquisition date supported.
That closing file creates continuity for later sales, distributions, token unlocks, and new broker reports. It also keeps company and personal ownership from being merged when the same founder controls multiple wallets.
The deliverable is organized so a return preparer can trace each summary back to transactions and documents without learning a proprietary dashboard. Disposal detail, income schedules, wallet ownership, transfer matches, closing lots, and open issues remain exportable and reviewable.
If the taxpayer changes CPAs, the evidence package still explains the work. If a protocol or exchange disappears, the saved source files and transaction identifiers preserve the history. This portability is especially valuable for founders whose activity spans personal, company, and DAO accounts over several years.
Gas, bridge charges, exchange commissions, protocol fees, and off-ramp costs should not disappear into a miscellaneous bucket. We retain the asset, timestamp, source, and related transaction so the CPA can review how each supported amount affects reporting.
Austin founders and contributors may receive assets from a DAO, foundation, startup, grant program, or protocol treasury while also controlling technical deployment wallets. We tag payer context, ownership, receipt purpose, and later movement from the supplied records. That prevents operational addresses from being casually merged into the contributor’s personal investment history.
Governance proposals, grant milestones, streaming-payment dashboards, vesting schedules, and multisig approvals can explain why a receipt occurred when raw chain data cannot. Indexing that material gives the return preparer a compact evidence trail for compensation and ownership review.
The most expensive Austin mistake is disposing of appreciated lots while California residency arguably still holds. We build the per-lot disposal timeline against the move date so the sequence is documented, not argued.
California looks back at departing high earners: housing, day counts, family, and business ties. The crypto half of that defense is lot-level sale dates, and that record is exactly what we produce.
Central Texas miners accrue rewards daily, sometimes hourly. Each receipt needs a timestamped fair market value, and the totals feed Schedule C for operations run as a business. We rebuild the full stream from pool and wallet data.
RSU vesting from Tesla, Apple, or a startup stacks with crypto disposals to create withholding gaps and estimated payment surprises. We deliver clean crypto numbers so your CPA can see the whole year in one picture.
Borrowing against BTC is not a taxable event, but collateral liquidations are, and multisig custody moves must be documented as transfers rather than disposals. Austin's Unchained-style holders need this handled precisely.
Many transplants arrive with several unreconciled years. We rebuild back-year ledgers so amended or late returns rest on accurate basis and the first full Texas year starts clean.
Reviewed August 2026. These first-party resources support the general federal and state information on this page. Your CPA applies the current instructions to your return; Count On Sheep supplies the reconciled crypto records and form-ready inputs.
Follow the Austin service path into the national forms, basis, DeFi, and reconciliation guidance behind the local engagement.
See how Count On Sheep turns exchange, wallet, DeFi, NFT, and income activity into one CPA-ready reconciliation package.
Understand broker-reported proceeds, transferred assets, missing basis, and the records needed to reconcile the form.
Follow the evidence path from prior exchanges and self-custody wallets to supported Form 8949 basis.
Learn what to preserve for liquidity pools, staking, lending, bridges, NFTs, and related income or disposal events.
Review the Form 8949, Schedule D, income, cost-basis, and supporting workpapers delivered after reconciliation.
For time and efficiency, all Count On Sheep meetings are held by video conference. This lets our specialists review your situation securely, share screens when useful, and serve you without travel or office delays.
No. Texas has no personal income tax, so crypto gains are taxed only federally. Form 8949, Schedule D, and the digital asset question on Form 1040 still apply, and mining or staking income still lands on Schedule 1 or Schedule C.
Selling after Texas residency is established can save up to 13.3% of the gain, but California audits that exact sequence. Your CPA advises on the timing for your facts. We produce the per-lot record that proves which sales happened on which side of the move.
Domicile facts: where your home, family, vehicles, licenses, and business ties sit, plus day counts in each state. Our contribution is the crypto ledger with exact disposal dates, which is the piece software and memory both get wrong.
Rewards are ordinary income at fair market value when received, and operations run as a business report on Schedule C with equipment depreciation and power costs. We reconstruct the reward stream and hand your CPA the income figure and the supporting detail.
No, loan proceeds are not income. But a collateral liquidation is a disposal of your BTC at that moment's price, and collateral movements into multisig custody must be documented as transfers. We track all three so nothing gets misreported.
No, moving your own coins is not a disposal. But every transfer breaks naive software basis tracking, which is how phantom gains appear. We reconcile transfers so each lot keeps its original basis and acquisition date.
Federally, often yes. With no employer withholding on crypto gains, a large disposal can trigger quarterly estimated payment obligations and underpayment penalties if ignored. Your CPA sets the payment schedule. Our contribution is the realized gain number, delivered accurately and early enough to actually plan with.
Yes. That is the design: 8949 detail, Schedule D totals, Schedule 1 or Schedule C inputs for mining and staking, and workpapers behind every number. Your CPA files from it directly.
Exchange access or CSVs, wallet addresses, mining pool statements if you mine, prior returns that touched crypto, and your move date if you relocated from another state. We scope it on a free consultation call.
