Crypto tax reporting with Shulkin Tax Solutions: start with activity history, not the balance

The amount displayed in an app today is a convenient starting point, but leaves questions unanswered: when were the coins bought, did some arrive from another wallet, which assets were sold along the way and what fees were paid? Before inferring your profit from a balance, build the sequence of actions. That also lets the first professional conversation address the problem itself, rather than decipher which account each screenshot belongs to.

What to prepare before contacting a crypto accountant

Open a short document listing the exchanges you used, your period of activity on each and the main activity types. Beside each exchange, note whether you can access the account and have downloaded its history. Add independent wallets, including ones no longer used. Such a source list can be more useful than a large file whose contents are unclear.

You do not need to resolve every discrepancy beforehand. State explicitly, for example, that an account opened in one year but your file begins later. If an exchange changed its name or you moved coins between your own accounts, add a note beside the relevant entry. The aim is to show what is known and what needs investigation, without filling in plausible numbers from memory.

• Original transaction, deposit and withdrawal files from every exchange used.
• Bank transfer confirmations and purchase documents that can be matched to crypto activity.
• A list of public addresses and networks used, explaining who owns each account.
• Previously filed returns, earlier calculations and relevant correspondence.
• Questions about missing periods, unfamiliar actions and movements whose classification is unclear.

Keep original files separate from working copies. Correct headings, add notes or rearrange columns in a copy. This allows a return to the exchange-generated document to establish where a figure came from. Give each file a name identifying its source and date range, rather than leaving similarly named documents in the downloads folder.

How Shulkin Tax Solutions fits into the process

Shulkin Tax Solutions (Opens in a new tab) supports individuals and companies with crypto activity and dealings with the Israel Tax Authority. Its services include activity calculations, ongoing reporting, handling earlier years' reports and preparing information on funds' origin and route for dealings with the banking system. CPA Natalie Shulkin heads the practice.

The practice also handles cases involving many exchanges, multiple wallets and activity in decentralised financial systems, known as DeFi. Alongside private clients, it provides crypto calculations for accountants and tax advisers. This option is relevant to those already using a firm for their annual return and seeking focused treatment of digital currency data within it.

Before work starts, define the required output: an activity calculation, appendices, a filed return, handling past years or a document explaining the source of funds. These are different deliverables. Ask the service proposal to specify the review period, material you must supply and how requests for additional information will be handled. This lets you assess it against the work you need.

Movements between wallets matter as much as trades

Try reading the file as someone who was not present during the activity. They see a coin leaving one account and entering another. Understanding what happened requires links between records: date, quantity, network, transaction ID and an explanation of account ownership. Without that context, two rows describing one action may look like separate events.

Try a simple check: choose a transfer you know well and locate both sides in the collected material. Can you move from the exchange record to the transaction ID and then to the receiving account? If the quantities differ, flag the gap alongside the fee record. You do not need to determine the tax treatment yourself to show a professional where an explanation is needed.

Even an apparently complete file may be partial. Check which action types it includes, whether exports are limited to a period and whether subaccounts are covered. Record when it was generated. When sending a new version, say whether it replaces an earlier one or adds another period. These small working habits make the case easier to track.

Separate tax assessment from preparation for the bank

Calculating gains or losses and explaining the source of funds answer different questions. The first examines activity for reporting; the second explains where money originated and how it moved between accounts and wallets. Some documents serve both processes, so collect them in a reusable way rather than building a new file from scratch each time.

If you plan to transfer funds to a bank account, first ask the bank for guidance on your case. Give the accountant the request's wording and documents already submitted. Keep any additional request beside the response sent. This makes it possible to see which questions have been answered, which remain open and who should handle each addition.

For background on the distinctions and terms, read the guide to crypto tax in Israel. It helps explain the questions, while your personal case requires connecting them to your actions. Come to the conversation with a clear goal: reporting a particular year, examining old activity or preparing records ahead of disposal and transfer.

What to do when some history is missing

Instead of hiding gaps inside a summary file, list them. For example: an old exchange is currently inaccessible, a deposit lacks a purchase confirmation, or you recognise a wallet but cannot remember when you began using it. Beside each gap, note which documents exist and what retrieval attempts have been made.

Ask the practice what the existing material can establish, what to request from the exchange and what requires further investigation. Ask for the output to distinguish documented data from assumptions required for the work. An organised case is not one in which every question has disappeared, but one showing how conclusions were reached and what remains unresolved.

During collection, separate activity information from the means of accessing assets. Seed phrases and private keys are not reporting documents. For their meaning, see the guide to seed phrases and private keys. Agreeing a secure document-transfer method is part of preparing for a professional service, especially with years of financial activity in the files.

The first conversation should end with a work plan

Contact Shulkin by phone on 054-8899788 or through the website's enquiry form. Prepare a short description of your activity years, number of exchanges and the issue requiring attention. You do not need to send everything immediately. Establish suitability and scope first, then agree what to send and how.

Aim to leave the conversation with clear responsibilities: what you collect, what the practice checks, which output is required and what must happen before submission. At completion, keep the final output, underlying files and filing confirmations together. The next time you need to explain your crypto activity, you will already have a usable starting point.