Topic: Will Bittrex provide tax documents at the end of the year, or am I responsible? (Read 413 times)

I echo this sentiment as well. I downloaded the CSV provided by Bittrex today just to get an idea of how much tax I am supposed to pay in the upcoming assessment year and I found over 2000 trade entries there for this financial year alone with still 4 months to go. But that's not the issue. The issue is that it's impossible to make out the profit and loss on each trade since there are several hundreds of partial trades there between BTC/ETH and other currencies and there is no way to know what the price of BTC or ETH at the time of the trade since it is not recorded. It's also impossible to figure out which buys and sells can be paired together to calculate profit and loss.

From this I can conclude that only a moron would go through the hassle of keeping detailed record of each and every trade. If someone is doing that, I have my doubts on how much time he is actually spending trading as opposed to keeping records.

That's all well and good if you are okay with evading taxes. Personally, I don't care regarding other people -- I think taxes are generally unjust. But I've had hundreds of thousands of dollars enter my bank accounts from Bitcoin exchanges. If you think I will play fast-and-lose with the IRS, you'd be wrong. If you're going to cook your books, be very smart about segregating funds and know that if Bitcoin is worth $1mm someday that it's going to be difficult to explain where all the money came from when you haven't been paying taxes on your income for many years. Merely using crypto does not absolve everyone from following laws.


How is it out of touch with reality? As I said: "traders will probably be able to get away with a lot. But that doesn't mean that taxes aren't technically due." And it doesn't matter if you are trading against Bitcoin. The IRS has very clear guidance about determining the market value of assets for determining capital gains. The IRS doesn't care whether you use USD or not. They regulate taxable income. Income is clearly defined and has nothing to do with "fiat." If your income is paid in gold, you still need to pay income tax.

If we could all legally avoid paying taxes just by transacting in another currency, why would anyone pay taxes at all? Why would corporations not be taking advantage of this?


Ownership absolutely changes hands when orders are executed. Otherwise all the exchanges are frauds -- unlikely. If what you say is true, the exchanges technically have no custodial obligations and can freely steal everyone's money. After all, coins you send them aren't "owned" by you, nor are coins received in a trade "owned" by you. Why should you be able to withdraw them if you don't "own" them?

The truth is that you very much "own" them and the exchanges are liable for these obligations.

Nice rant, but right out of touch with reality. Bittrex doesn't trade fiat, and stock traders don't trade one stock for another without passing though fiat. They are completely different. In order to calculate capital gain or loss, you need a fiat value. A better analogy would be casino chips, profit of loss is calculated when you turn them back into fiat, the rest of the time they are an internal token of the casino. Not unlike the IOU token WEX and Bitfinex issued this year, their credit is useless anywhere else but inside the exchange.

When you Etrade a stock, ownership changes hands, that is not the case with a crypto exchange.
When I trade LTC for BTC on Bittrex, ownership of coins doesn't change hands, therefore there has been no trade off the assets, just an IOU in the exchanges's database. Only when the public key on the blockchain changes is the ownership transferred, and this happens at the time of deposit and withdrawal on Bittrex.

No one beside an idiot will go through so much hassle to declare something the government isn't even aware of you hold it. The far majority of the people 'silently' continue their trading sessions every year, and that's how it should be -- if there is no need to unnecessarily declare anything, then it should not be done. I haven't declared anything I ever gained, and I don't think I ever will, unless exchanges will at some point start snitching on their customers. It might actually turn out to be part of the governmental regulations that exchanges have to abide by in the far future, who knows....

This is really bad advice. Capital gains taxes are calculated based on your annual net trading gains (in addition to investments you may have liquidated during the tax year). You think stock traders can avoid paying taxes just by leaving gains in their E-trade account rather than withdrawing it? To the IRS, every transaction is potentially taxable. Withdrawals are not taxable.

In these early days, since cryptocurrency exchanges/brokers are not providing tax documents, traders will probably be able to get away with a lot. But that doesn't mean that taxes aren't technically due.


Bittrex won't provide any tax document. You are responsible. They can provide an exportable list of all your trades. You are supposed to calculate the cost basis of your entries and exits in USD to determine the capital gains. Trading against bitcoin is a real bitch for calculating taxes. You might consider hiring a CPA to do your returns if you're making good money trading.

great point. but what about if i withdrew it to a hardware wallet?  That's still technically virtual and not any real earnings then, right?

Trading means little, just add up your deposits and withdrawals see which is bigger and report the difference, that's your profit or loss.

Remember unless it's a deposit or a withdrawal, then you haven't actually made a trade, it's all within the virtual world of the exchange and what you think you have done isn't real until you withdraw it.

Welcome to the world of trading

I can't say for certain whether they would, but based on section 4.5 of their ToS (https://bittrex.com/Home/Terms) I'd say no.

There should be quite a few sites out there that will allow you to calculate your average cost basis, however. It is generally recommended to keep your own records anyways, as I've been told that even if your exchange or broker provides you with an ACB you're on the hook if you use that and its wrong.

Will they provide a document stating my total gains or losses, or am I responsible for totaling these things up and reporting them?  I did a lot of trading earlier in the year and I can't find a simple solution for totaling anything; almost looks like a nightmare.