For many who trade cryptocurrencies through FTX, there may be reasonable doubt as to whether or not the platform reports its clients’ trades to the IRS.
This platform has operated in the United States and may maintain clients in the country. Let’s see what is going on and what things you should be aware of if you trade cryptocurrencies.
FTX and the IRS
We should remember that FTX no longer operates in the United States. That, on paper, means that the jurisdiction would not oblige the platform to provide information. Moreover, FTX US was already created at the time as an alternative element.
Does this mean it has not come under pressure from the tax authorities? Not at all. It is more than likely that the US tax authorities and the other countries put these platforms under strong and constant pressure.
The platforms do not report this and maintain a certain degree of secrecy. That is a known fact; all major exchange platforms are under pressure from the tax authorities.
So, while they are not legally required to file returns with the IRS, US citizens should remember that any gains they make, regardless of whether they are within the country’s tax jurisdiction, must be taxed. The advice is pretty clear: try to stay current on taxes.
Can FTX help you in calculating your taxes?
The answer is yes, but with nuances. This platform does not offer a tax report. That means you will not find documentation that breaks down your tax liability.
However, it does have certain tools that can help you in the process of identifying what your taxable income is, at least as far as operating on the platform is concerned.
To begin with, you can thoroughly review your transaction history on the platform. The user has a very interesting crypto tax calculator at his disposal. It can automatically generate reports that you can apply to know your taxation.
Another very used and simple formula is using the platform’s tax reporting API. Through it, you will be able to access all your transaction history. Therefore, you do not need to download additional documentation; everything is here.
Of course, it is a read-only tool: any tax application you choose will not have access to the account; it will only allow you to view the transactions.
The slow alternative would be to choose the API to download CSV files. The number of files will depend on your transaction history. If you trade a lot, there may be a lot of them. Can upload these files to different applications. If you are using an external application, you can usually use them to calculate your fiscal duties.
Other tools you can find in FTX
These are not the only tools you will find in the platform for a good analysis of your economic operations and, by extension, for good fiscal control.
Accessing your financial status through your transaction history is another good idea. Notice that we are doing the same thing. We are accessing the transaction history to use it as a starting point.
In this case, we can create a tax statement from that transactional history. In many cases, simply using the record itself will justify incorporating it into your tax documentation.
However, it is important to remember that profits are taxed, and losses are deducted. You must thoroughly analyze everything corresponding to the fiscal year you are going to declare. Incorporate everything since an error in this sense can suppose the difference between paying more or fewer taxes.
The manual calculation of taxes can be complicated, especially when it comes to the digital asset market. First of all, you must determine all the transactions that generate profits or losses and that are going to enter into the computation.
In addition to incoming and outgoing transactions, i.e., buying and selling, you will also have to record other deposit transactions. Therefore, you must join all the movements you have made with your digital assets.
One way to avoid this is to use external programs that allow you, simply by incorporating the data, to process all the information to simplify. You can do this from the platform itself, as we have seen, including the documentation that arises from the transaction history in online tax calculation tools.