Wondering how to report taxes on your Bittrex transactions?
Trying to figure out how to report your crypto taxes can be overwhelming, stressful, and confusing. We put together this guide to help simplify the process. By the time you finish reading, you’ll have a better understanding of how crypto taxes work and how you can report your taxes on Bittrex and other exchanges in minutes.
Bittrex is a well-known cryptocurrency exchange based in Seattle. The company offers its users a safe and secure environment where they can trade more than 700 crypto assets. Currently, the exchange handles more than $1.5 billion in monthly trading volume.
Bittrex was founded in 2014 by Bill Shihara, Richie Lei, Rami Kawach, and Ryan Hentz. The group had experience dealing with security-related issues and had been previously employed by companies such as Amazon, Blackberry, and Microsoft.
Over the years, Bittrex has built a reputation for security. The exchange offers all of its users two-factor authentication and a host of other features for safety and reliability.
To help you better understand how your Crypto.com transactions will be taxed, let’s go over the basics of crypto taxes.
The IRS considers cryptocurrency a form of property that is subject to both income and capital gains tax.
Income tax events: If you earned crypto from staking, mining, or as a payment, it will be considered personal income and will be taxed based on its fair market value at the time you received it.
Although you cannot stake or mine crypto on the Bittrex platform, if you transferred crypto income earnings into Bittrex, you will need to account for those transactions.
Capital gains events: You incur capital gains or capital losses every time you dispose of your cryptocurrency. Selling your cryptocurrency or trading it for another cryptocurrency on Bittrex would fall into this category.
It’s important to keep track of the holding period of your assets. If you hold your crypto for longer than a year, you will pay the slightly lower long-term capital gains tax.
Because of the peer-to-peer nature of cryptocurrency, it’s incredibly difficult for any exchange to generate complete tax forms for its users.
For example, imagine buying $10,000 of Bitcoin on Coinbase and then transferring it to Bittrex. If you end up selling your Bitcoin, Bittrex won’t know the cost basis of your coins since the original transaction took place outside of the platform. As a result, the platform won’t be able to calculate your capital gains and losses.
Luckily, there is another way for investors to accurately report their crypto taxes. Platforms like CoinLedger allow investors to easily file their taxes on all of their crypto transactions.
You can upload your Bittrex transactions into CoinLedger in five easy steps.
Step 1. Log in to your Bittrex account.
Step 2. Select the ‘Orders’ button on the Menu header.
Step 3. Under the ‘Recent Orders’ section, select ‘Download History’.
Step 4. To create an accurate tax report, download your trading history for all relevant years. You will need to download a separate CSV file for each individual trading year.
Step 5. Navigate to the Bittrex tab within the CoinLedger platform. Here, you can upload your CSV files or connect your account via API.
And that’s it! Once you upload your transactions for Bittrex and all other relevant exchanges, you will be able to directly file your tax return or send your transaction information to your crypto accountant.
Looking to file your taxes on Bittrex and other exchanges? Crypto tax software can help.
With CoinLedger, you can file your crypto tax return in minutes. Our support team is available for all of our customers in case you run into any problems during the import process.