Are you a US resident trading crypto on FTX.US and wondering about taxes? On FTX.US, US customers can trade cryptocurrencies, stocks, and NFTs. Additionally, US residents can receive crypto rewards, crypto payments, or pay in digital assets with the FTX card.
Let’s cover how trading crypto on FTX.US is taxed and how to become crypto tax compliant with the help of crypto tax software.
In this article:
Is trading crypto on FTX.US taxable?
For US residents, trading crypto on FTX.US is a taxable event, subject to capital gains taxes.
FTX.US offers several crypto trading pairs, resulting in taxable operations each time you sell any of your crypto holdings.
Whether you trade crypto-to-crypto or crypto-to-FIAT pairs, you’ll have to determine the gain/loss on each trade and report it on your taxes, depending on the sales proceeds and your cost basis.
If you trade your bitcoin for USD on FTX.US after holding it for more than 12 months, you’ll be subject to a long-term capital gains tax rate.
If you held your bitcoin for no more than 12 months, you would face a short-term capital gains tax rate which is the same as for ordinary income.
Do you pay taxes for trading NFTs on FTX.US?
Yes, trading NFTs in the US is a taxable event, subject to capital gains taxes. In the US, crypto and NFTs are taxed similarly, with the need to determine the gain/loss on each trade and report it on Form 8949.
If you’re an NFT creator, your proceeds from the sale of your NFT creations will be taxed at an ordinary income level and not at a capital gains level like for trading.
In conclusion, if you trade NFTs or sell them as a creator on FTX.US, you’ll be taxed and need to report those gains/losses and income.
How are crypto purchases with the FTX card taxed?
In the US, making purchases with crypto will be taxed at a capital gains level, as you’re disposing of some of your crypto holdings for purchases, which is the same as selling crypto for fiat in a trade.
We’ve already seen that selling any of your crypto holdings for another crypto or FIAT is taxable.
That’s what happens when you purchase any product or service with crypto. Learn more about the tax implications of purchasing products with cryptocurrencies.
You’ll be taxed at the capital gains level whether you buy a product with crypto directly or with a crypto debit or credit card like the FTX card.
Check out this guide to the 13 best crypto debit cards out there.
Does FTX.US report to IRS?
Yes. Crypto exchanges that serve US customers are required to follow KYC procedures, and when summoned to do so, they have to share data with the IRS.
Also, under the new tax provisions passed due to the Infrastructure Bill, all US-based exchanges are required to issue Form 1099-B for their customers starting from January 1, 2023.
You should always report all of your crypto transactions according to the current tax guidance and regulations to avoid penalties, fines, or even jail time.
Does FTX.US provide 1099?
Yes. Crypto brokers like FTX.US provide 1099 forms either voluntarily or as required under the law.
From 2023 onward, the new infrastructure bill will cause crypto brokers serving US customers to provide 1099-B forms with crypto reporting information and transmit that information to the IRS.
What is the difference between FTX.US and FTX?
FTX.US is the FTX arm serving US customers, while FTX is not available for US residents but people in other countries.
The same distinction happens with Binance US and Binance, given the regulatory landscape in the US causing exchanges to operate differently.
How do I report FTX.US taxes?
You can report your FTX.US taxes by importing your crypto trades, determining your gains/losses and crypto income, and generating tax reports using crypto tax software like CoinTracking.
All of your gains will be divided into short-term and long-term based on your holding period, which will be taxed at different rates and included on Form 8949. These include all of your crypto or NFT trades and crypto purchases.
If you gained any income from crypto rewards by participating in any challenge, you would be taxed at the ordinary income level.
To generate FTX.US tax reports, use a crypto tax tool like CoinTracking, where you can get all of the information ready to be included in tax reports and make your tax season much easier.
How to report FTX.US trades?
Here’s how to import your FTX.US trades into CoinTracking to help you track your gains and get compliant FTX.US tax documents:
Log in into your FTX.US account and go to 'profile'
Scroll down to API Keys section
Press CREATE READ-ONLY API KEY
Copy your API Key and API Secret here
If you want to import only transactions from one of your subaccounts, input its name into the "Sub-Account Name (optional)" field and disable the "All subaccounts" slider below
Your trades will import automatically
For more details on importing your FTX.US trades, check this FAQ.
Learn how to import trades from FTX.US into CoinTracking:
The best FTX.US tax software: CoinTracking
The best FTX.US tax software in the market is CoinTracking.
You can import your trades using CSV or API, track your gains/losses, and generate tax reports according to your preferred accounting method.
Beyond FTX.US, CoinTracking is your full crypto tax solution for:
DeFi and NFT support with our ETH+DEX importer.
Importing your Binance Chain, Binance Smart Chain, and MATIC transactions.
25+ advanced reports, including which coins offer you a tax-free rate.
Automatic capital Gains, according to 12 accounting methods (e.g., FIFO, LIFO, HMRC, ACB), accepted worldwide.
Generating complete Tax Reports in your country.
Moreover, CoinTracking can easily classify all your earnings from yield farming, liquidity pools, crypto staking, and much more.
FTX.US taxes with no errors: CoinTracking Full Service in the US.
CoinTracking also offers a Full Service for US traders. A crypto reconciliation tax expert from Polygon Advisory Group, a leading US crypto tax firm, will review your CoinTracking account, help fix any errors, and ensure you submit your crypto tax reports error-free.
Do you have any crypto tax questions? Check the best guides:
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FIFO for crypto taxes? Implications of accounting methods.
NFT Taxes: The Complete Guide.
Is Bitcoin taxable? The ultimate guide for 2021 taxes.
How to reduce your crypto taxes?
Crypto tax loss harvesting: Here’s what you need to know
This post is part of the Crypto Taxes AMA series. Follow our weekly AMAs on Twitter where our expert CPA, Sharon Yip answers your crypto tax questions. You can download 35+ AMA crypto tax reports for free.
Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.