In 2018, product consultant Vamshi Vangapally needed to figure out how to file taxes on his cryptocurrency transactions. He had tried to alleviate his anxiety around trading cryptocurrency by using a bot to automate his trades. It didn’t work.
When the bot he’d programmed posted nearly 20,000 transactions in a couple of days, the flurry of activity got him flagged by the IRS and left him scrambling to calculate how much tax he owed and how to file them appropriately.
U.S. citizens are required to pay capital gains taxes on cryptocurrency transactions; further complicating matters, the IRS considers cryptocurrency property that can be federally taxed.
“I tried using existing tools and they either failed to import or stuck with huge volume.” Vangapally tells Hypepotamus. “So, I had to make something that could bring in my trades from 3 different exchanges and calculate my gain-loss.”
Seeking answers, he took to cryptocurrency forums online, including Reddit, where he encountered a slew of panicking traders. They were worried about notices from the Global Digital Asset Exchange (now Coinbase Pro) informing them that cryptocurrency exchange Coinbase would be turning their financial information over to the IRS.
Because they hadn’t thought about taxes as they traded cryptocurrency, they needed the same answers Vangapally did, which led to an exchange of ideas and information — and a bit of inspiration.
He consulted colleagues and designed a workflow with usability factors in it. After 20 days and late nights, they emerged with the cryptocurrency tax platform BearTax in February 2018. His first […]
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