As we approach the end of the 2023 Financial year, the task of gathering exchange information and tracking tokens may seem overwhelming. However, we are here to help. This article provides a comprehensive guide on what is needed to calculate your taxes with precision and efficiency, along with an overview of what to expect.
A stock take of crypto that you held on 31 March 2023
To make sure we get your closing stock calculation right and catch any missing transactions, we require a stock take report on the quantities of each cryptocurrency token you held on 31 March 2023. This way, we can compare it to your portfolio for reconciliation. Just jot down something like the example below:
Exchanges and wallet exports
We need to know about every single taxable event to make sure we reconcile your portfolio correctly. That means we need to keep track of when you acquire or sell any tokens. If there are any missing trades or incomplete records of token acquisition or disposal, it might cause some delays, reconciliation issues, and potentially higher accounting fees.
Please refer to our detailed instructions on how to export your transaction history from most exchanges in the PDF available for download here. It is important that we get the information in the correct format*
*Specific instructions for the following exchanges must be followed: Binance, Kucoin, Bittrex, CEX.io, Crypto.com, Exodus Wallet
Details of missing exchange records
Some cryptocurrency exchanges (like FTX) have gone bankrupt, leaving users unable to access their transaction records. If this situation applies to you, please inform us, and provide as much detail as you can remember about your activity on that platform.
Decentralized exchanges and wallet addresses
Transactions on decentralized exchanges (such as Uniswap, dYdX, 1inch…ect) are taxable events. Your wallet address and corresponding chain(s) must be provided so transactions can be extracted from each blockchain. Something like the below would be helpful
Information on loans, collateral finance positions or borrowed crypto
Lending platforms are notoriously bad at providing accurate loan information in transaction exports. If you have participated in cryptocurrency loans or collateral finance positions, we need information on borrows, repayment, collateral locks/unlocks, and liquidations. It would be fantastic if you could provide us with something like the example below.
Other taxable transactions
It’s crucial for us to include all taxable events, such as buys, sells, swaps, trades, ICOs, lost/stolen tokens, gifts, purchases on behalf of others, margin/futures trades, staking liquidity pools, mining, and cryptocurrency income in your taxes. Please provide us with details of these transactions if they are not already in the exchange histories provided.
Got any questions? Give us a shout! We’re happy to help.
Contact Tim Doyle for a call or meeting to discuss any cryptocurrency tax or accounting questions. Our office is in Cambridge, Waikato, or we can arrange a video conference call.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.