Does Count On Sheep Have a CPA on Staff?
Yes, say hi to our CPA Justin Z. our Senior Crypto Account Manager and Founding Employee. He had an impressive career at EY, one of the “Big 4” accounting firms and brings his expert knowledge and experience to our team.
Do you file my crypto taxes?
No, we are a crypto tax preparation company. This means we get your crypto portfolio organized i.e. all your trades in one easy to understand platform, reconcile your crypto activities, select a tax compliant model that saves you the most, and fill our all necessary IRS compliant forms to hand off to your CPA to simply file on your behalf.
In the event you do not have a CPA, we would be happy to point you in the right direction within our national CPA network.
Why Choose a Crypto Tax Reconciliation Firm?
There are 3 main reasons you would hire Us:
- Organization - We get all your crypto exchanges and wallets on one manageable platform to get you organized, which can be a significant chore in itself!
- Savings & Accuracy - We create tax savings and peace of mind by having our team meticulously reconciling and categorizing your crypto activity then work IRS compliant tax models that save you the most, while keeping you tax compliant.
- Hand Off - We take the complex and make it deliverable for your CPA or for you to file. Count On Sheep provides all necessary IRS compliant forms, filled out, for you to simply send to your CPA to file alongside your other taxes.
Prove to me definitively that the tax reports from the major exchanges could be flawed?
Cryptocurrency platforms such as Coinbase, Binance, Gemini or name your favorite, often struggle to provide users with precise reports on their capital gains and losses for tax purposes. This limitation is not due to any shortcomings on the part of the exchanges; rather, it stems from the inherent properties of cryptocurrencies, especially their ease of transfer.
Given the frequent movement of cryptocurrencies by users into and out of these platforms, exchanges lack the necessary information to determine the original acquisition details of the cryptocurrencies, including how, when, where, or at what cost basis they were obtained. The platforms only record the moment cryptocurrencies are deposited into a wallet and their corresponding USD value at that time.
As a result, any movement of cryptocurrencies into or out of an exchange immediately impedes the exchange's ability to accurately track and report the cost basis of these assets, a critical piece of information required for tax reporting.
What is the Digital Asset Reconciliation (DAR) process that Count On Sheep uses?
The Digital Asset Reconciliation (DAR) process is a mix between getting accurate crypto books recorded and a technical forensic audit chasing around your cost basis on all your crypto assets in the cryptosphere to make sense of your crypto portfolio for the purpose of tax savings and reporting.
This skill set is not mainstream and needs a technical professional to understand and access the blockchain and stay on top of the ever changing tax rules with crypto; that’s where Count On Sheep comes in.
I hate being billed hourly, what can we do about that?
We agree! There is some good and bad news here.
Starting with the bad news, we need to bill hourly at first. This is because we are not familiar with you or your crypto portfolio. We cannot gauge the ease or complexity right out the gate. However, rest assured, we have some of the most streamlined processes, technology, and professional teammates in this emerging industry. This will give you piece of mind that we are being accurate and timely with your account to save you money.
The good news is, after you have become a client, we can average your crypto activity into a fixed pricing model going forward.
My CPA can do my crypto taxes?
They are probably not lying. CPA’s can file your crypto forms on your behalf but how good are they at preparing those forms for crypto? CPA's are not necessarily crypto experts; they have been formally trained in fiat currency. Moreover, do they have a formal process like (DAR) to accurately track cost basis across exchanges and reconcile NFT, DeFi, mining, and other segments of crypto? Are they trying to learn these processes at your hourly rate and at your expense?
Luckily, Count On Sheep works with your CPA. We do the organization, technical analysis, reconciliation, and tax forms to maximize your savings and assure your accuracy. All you need to do is forward your completed tax forms to your CPA when we are finished for them to file on your behalf.
But my CPA says they do crypto taxes on their website?
Yes, most of them are now saying that. They are most likely worried about losing clients from not understanding the complexities of crypto tax preparation. With an approximate 46MM American’s holding some kind of crypto, that’s a noteworthy segment of our population.
The good news is Count On Sheep works with CPAs and CPAs like working with us. We even have CPAs on staff trained in crypto tax preparation! The difference is we stay in our lane. We leave the filing of your crypto taxes to your CPA and we provide the completed tax forms to you to give to them. If they have questions about them we have explanations. It’s a team effort that gets you the best results!
I only use one exchange like Coinbase and you seem like you only do large multiple exchange crypto portfolios?
Our team invites anyone who needs Crypto Tax Preparation done for the tax season. Yes, you are correct in the sense we are equipped to handle complicated crypto portfolios and transactions. However, we do small projects as well so you have peace of mind that your tax forms were done accurately and with tax savings in mind.
If you have a small portfolio and would like our expertise, we would be glad to extend a flat fee rate to quickly and efficiently take care of your crypto tax preparation.
I’m a business and need crypto bookkeeping done on the regular?
While the majority of our clients are B2C we service B2B clients as well. Whether you are a high-volume institutional trader or handle crypto on your business's balance sheet, we can help prepare those for you!
Contact us for further assistance and we can set up a custom plan tailored exactly to your business needs. P&Ls, balance sheets, income report, capital gains reports and many others:
- Gifts, Donations, and Lost Asset reports
- End of year holdings report
- Expense reports
- Transaction history report
- Counterparty transaction report
- Fee Expenditure report
- Positions report
- Assets report
Note: For B2B clients we use different Enterprise level software to meet specific reporting requirements.
Can you help with the crypto tax preparation for my NFTs?
Yes, in fact we love reconciling NFT portfolios! We have a strong record working with some of the top NFT holders, with portfolio values reaching 18MM at the peak of the last bullrun, over 16,000 transactions, consisting of Bored apes, Mutant Apes, Crypto Punks and many more.
No matter where you are in your NFT portfolio we can help get your tax forms accurately reported.
Case Study Coming Soon!
Why choose Koinly as your platform of choice?
After working with several of the top crypto tax softwares we arrived at Koinly because of their (1) tax code updates (2) the website user experience is easy for anyone to understand once we have your dashboard set up (3) desktop and mobile access (4) Clean & Accurate Reports (5) Customer Service (6) Multinational capabilities and (7) future tax savings alerts
Do you handle tax preparation for DeFi?
Yes, Decentralized Finance or DeFi is a multifaceted, fast changing, ever evolving piece of the cryosphere and when doing your tax preparation it needs careful consideration. Luckily, our team has the software and hands on knowledge to handle complex DeFi crypto portfolios to give you proper attribution and reconciliation for your crypto tax reporting.
Can you do everything for me A-Z so I don’t have to worry about it?
Yes, we can guide you through the onboarding process, then we take it from there. We meticulously go through and reconcile your crypto portfolio, identify the best IRS tax compliant tax model, and unlock savings. Not to mention we handle all the tax forms and deliver them right to your inbox.
Why do you need to go back to when I started my crypto portfolio?
Yes, we understand you want to get your crypto tax forms prepared for this year only.
The issue is we need to establish what is called Coast Basis and in order to do so we need to find the entry point when you first started trading crypto defined as: the original cost of obtaining the asset. From there, we can properly reconcile and apply the best tax model for you.
This is standard to any accounting practice and not just a policy of Count On Sheep. The good news is we have the software, technical ability, and professional staff to get you caught up quickly.
Note: If you started acquiring crypto this year, this does not apply to you.
Reporting Each Crypto Transaction
We provide all necessary completed tax forms for you to hand off to your CPA. Most common is Form 8949 and Schedule D. Also, consider these forms:
Why does this service cost more than a regular bookkeeping or traditional tax preparation service?
The cost of cryptocurrency tax preparation services are higher because of the complexity of crypto transactions, the evolving regulatory landscape, the specialized knowledge required, technological solutions necessary to handle the data, and just really, really, really, well educated people handling these portfolios.
Also consider, cryptocurrency transactions can be significantly more complex than traditional financial transactions. They can involve numerous trades across multiple exchanges, each with its own cost basis and capital gains calculations. Additionally, transactions like staking, mining, airdrops, and DeFi (Decentralized Finance) activities introduce further complexities that require specialized handling for tax purpose
How do you secure my data if I share my crypto portfolio with you?
Similar to the way your CPA or traditional bookkeeper works, you will provide “VIEW ONLY ACCESS” through the third party tax platform’s (Koinly) API. The API adds the extra layer of protection from your exchange or wallets to the platform itself.
Basically, the same way Quickbooks works with your Bank Account information, Koinly uses the same method with your crypto exchange(s) importing your data into its platform but cannot trade your or access your coins.
