Feature Request (Tax Reporting)

[ywu999]

As Multibit already has the exchange information and wallet information, it would be a logic step to generate statements for the whole account for the purpose of tax reporting.

This feature would be consistent with the goal of promoting bitcoin to new user. Per recent US IRS guideline, tax reporting would be a big headache for new users.

[gary-rowe]

Yes, we view this as an important feature.

In MultiBit HD there is a payment export button which provides a CSV containing the spot rate at the time of the transaction. Here's a quick example:

Date,Status,Type,Description,Private notes,Amount MICON,Amount $,Exchange rate,Rate provider,Transaction fee,Coinbase,Transaction id
"25 Feb 2014 10:59","GREEN","RECEIVED","By: 16xGLqpra3o1qcHg2seU8NNtChJzg4Zu9K","","100000","USD 0.50200000000000","USD 502.00","Bitstamp","","false","70dd5e3e9d197741cd27330089b0b55f4f5103c5b775ff7a147d7ef082c4d932"

See https://blockchain.info/tx/70dd5e3e9d197741cd27330089b0b55f4f5103c5b775ff7a147d7ef082c4d932

This feature might find its way into MultiBit Classic, but probably not since we would prefer people to upgrade away from random private keys where possible.

[ywu999]

The situation would be more complex regarding the tax reporting.

If it is a simple transfer without money changing hand (such as buy a coffee, virgin galatica trip or mine), we can apply that $502 price of bitstamp to the amount as the $ value for either sending or receiving. If the user Liz buys the btc on localbitcoin.com or some exchanges, her cost basis need to be adjusted to her real acquisition and associated costs. On the other hand, if she sells her bitcoin for $, her real receipt would be lower than the exchange quoted amount.

Basically the user needs to know the transaction is in BTC economy(buying/selling goods/service) or exchange(buying/selling btc), and adjust the cost basis and taxable amount accordingly. It is painful process. Hopefully the feature provides an easy to use interface to minimize the pain.

If the output .csv file has the format required by the SCHEDULE-D form of us tax report, http://www.irs.gov/pub/irs-pdf/f1040sd.pdf, that would be even better.

[gary-rowe]

The user has the option of providing notes so they can manually identify the nature of the transaction taking place. Any reasonable financial package will have a fairly flexible import process allowing an arbitrary CSV file to be parsed into whatever it requires.

These notes are available on both the send and receive so should be capable of assisting in determining the cost basis.

As far making the output look like a US tax code specific document that'll be extremely unlikely to happen. We don't have the resources to code for every possible tax system and MultiBit is used in just about every country in the world now.

It's such a shame that the IRS didn't follow the lead of the UK tax office.

[ralyodio]

i think if you tag a transaction as incoming or outgoing along with amount + current exchange rate is enough. I don't think MultiBit should try to accommodate specific tax laws, just allow a way to export the transaction history like paypal does or any other financial institution for import to spreadsheet or 3rd party software. Let them do all the calculations and figure out what's what.

[gary-rowe]

@chovy That's exactly the approach we're taking :-)