Does Magic Eden report to the IRS?

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Magic Eden

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Key takeaways

Magic Eden does not report directly to the IRS.
The IRS can still trace activity by analyzing blockchain data.

Cryptocurrency exchanges around the world are starting to report more and more information to government agencies. In this guide, we analyze Magic Eden’s tax reporting policies within United States. We’ll also break down a simple way to report your Magic Eden taxes in minutes.

What is Magic Eden?

Magic Eden is a multi-chain NFT marketplace and aggregator that allows you to discover, buy, and sell digital collectibles across blockchains like Solana and Ethereum.

Because it is non-custodial, Magic Eden does not collect Know Your Customer (KYC) information or issue tax forms. Users are responsible for their own tax reporting.

Still, the IRS can likely trace your activity on the platform.

Does Magic Eden report to the IRS?

No. Magic Eden does not share customer data with the IRS or issue 1099 forms.

However, your crypto and NFT transactions are public on the blockchain. The IRS can track your wallet, especially if you’ve transferred to/from an exchange with KYC.

In the past, the IRS has worked with contractors like Chainalysis to match wallets with known investors.

If I use Magic Eden in the US, do I owe taxes?

Yes. NFT and crypto activity on Magic Eden and other NFT marketplaces is taxable:

Capital gains: Selling an NFT, swapping it, or spending crypto is a taxable disposal subject to capital gains tax.
Ordinary income: Creator royalties, airdrops, or staking rewards are taxed as income when received.

Moving NFTs or crypto between your own wallets is not taxable.

Does Magic Eden have KYC?

No. You can use Magic Eden without verifying your identity.

Is Magic Eden legal in the US?

Yes. Magic Eden and other NFT marketplaces are legal in the US.

You are required to report your taxable activity from NFTs to the IRS.

How do I reduce my US taxes from Magic Eden activity?

While there’s no way to completely avoid taxes, you can take steps to legally reduce your tax bill:

Tax-loss harvesting: Selling crypto or NFTs at a loss can reduce your tax bill. Capital losses can offset an unlimited amount of capital gains and up to $3,000 of income for the year. ‍
Use crypto tax software: Crypto tax software like CoinLedger can import crypto and NFT transactions, generate a complete tax report, and help you identify your biggest tax-saving opportunities.

Looking for a simple way to report your Magic Eden taxes? With CoinLedger, you can import your Magic Eden transactions and auto-generate a complete gains, losses, and income tax report in minutes.

CoinLedger integrates with Magic Eden and dozens of other wallets, blockchains, and cryptocurrency exchanges to automate the entire crypto tax reporting process.

You can get started with a free preview report today.