With U.S. tax season upon us, the IRS has made clear that taxpayers who have been trading and using cryptoassets are obligated to report the many taxable events involving crypto transactions.
At SFOX, we believe that compliance shouldn’t be a complicated or onerous task. That’s why we’ve rolled out two different kinds of automatically generated transaction reports that may aid you in reporting your crypto trading activities this year.
Note: this article does not constitute tax advice. SFOX transaction reports are only accurate for those transactions conducted on the SFOX trading platform. Consult a tax professional in filing your taxes.
Reporting Crypto in 2019: Know the USD Value
For U.S. tax purposes, transactions using virtual currency must be reported in U.S. dollars. Therefore, taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. — IRS Notice 2014–21
For U.S. taxpayers, many types of cryptoasset transactions have been identified by the IRS as taxable events that must be reported. These transaction types include:
- Selling cryptoassets for USD — e.g., selling ETH for USD on SFOX
- Selling cryptoassets for other cryptoassets — e.g., selling LTC for ETC on SFOX
- Receiving airdropped cryptoassets
- Receiving mined cryptoassets
- Exchanging cryptoassets for goods and services.
For crypto traders, it’s worth emphasizing that the IRS expects taxpayers to report the U.S. values of their crypto trades using the USD value of all cryptoassets involved in the trade at the time of the trade. For example, if one traded BSV for ETH on SFOX on September 19th, 2018, one would need to determine — and report — the USD value of the BSV and ETH involved in the trade at that specific date and time.
SFOX Transaction Reports Provide USD Values for All Account Activity
One of the most potentially challenging aspects of managing crypto tax reporting is determining the USD value of all the transactions you made over the year, especially when those transactions involve exchanging one cryptoasset for another. While we cannot provide tax advice and you should always consult a tax professional, we designed SFOX’s transaction reports with this in mind: it’s easy to see, at a glance, the total USD value of your transactions on SFOX’s trading platform.
Our platform features two different kinds of CSV transaction reports to allow you to easily understand your SFOX crypto trade history at a glance. The following are high-level summaries of these reports; for a more comprehensive explanation of every field in each report, please see the appendix at the end of this article.
If you’re looking to review your entire trade history for a certain month, quarter, year, or any custom time interval, this is the report for you. The report provides you with details on every trade you’ve made:
- What asset pair you traded
- The exchange rate between the assets in the pair
- The quantity of the trade and any fees associated with it
- Value of each asset in USD at the time of the trade
- The total value of the trade in USD
Monthly Summary by Asset
If you’re instead looking for a more filtered perspective into your trade history, you can try our monthly summary by asset, which shows the total buys and sells you’ve made of a given asset — for example, LTC. In the CSV, you’ll see:
- Any deposits or withdrawals of that asset you’ve made in a given month
- The total amount of that asset you’ve bought and sold
- The total value of your buys and sells of that asset, in USD
These reports are not a substitute for a tax professional, but they can help to make crypto accounting more straightforward — especially for those who trade multiple cryptoassets and crypto/crypto pairs. It can be a daunting task, to say the least, to be faced with a year’s worth of crypto trades and be expected to determine each trade’s USD value. Our goal was to make that task as easy as pushing a button — and, when you log into your SFOX account and select “Get Reports” in the dashboard, that’s exactly how easy it is.
Tools to Make Regulatory Reporting Second-Nature
While there are some mixed opinions when it comes to crypto regulation, the fact of the matter is that increased regulation — including tax reporting — plays a vital role in the infrastructure that will allow crypto to continue maturing and reach its full potential. The flip-side of that, however, is that it needs to be easy for well-intentioned participants in the crypto ecosystem to comply with those regulations.
We’ve built SFOX from the ground up with the goal of making reporting easy: that’s part of why we’re so selective about the cryptoassets that we enable for trading, and it’s why we’re excited to roll out these transaction reports to give you and your tax professional more visibility into your trade history.
Are there other tools you’d like to see to make compliance as a crypto trader easier? Let us know at [email protected]!
If you’re looking for more detail into the way each of SFOX’s two transaction reports are compiled, here’s a succinct explanation of every field in each report. Note that, in all instances of USD values being calculated in these reports, those values are determined based on the relevant cryptoasset/USD exchange rates at the time when the transaction(s) in question took place.
Each row in this report represents a specific order. From left to right, this is the information you’ll find in each row:
Monthly Summary by Asset
Each row in this report represents a months’ worth of one’s account activity with regard to a specific asset. From left to right, this is the information you’ll see in each row.
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The above references an opinion and is for informational purposes only. It is not intended as and does not constitute investment advice, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any cryptocurrency, security, product, service or investment. Seek a duly licensed professional for investment advice. The information provided here or in any communication containing a link to this site is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject SFOX, Inc. or its affiliates to any registration requirement within such jurisdiction or country. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by SFOX, Inc. or its affiliates to buy or sell any cryptocurrencies, securities, futures, options or other financial instruments or provide any investment advice or service.