IRS means internal revenue service; and it represents a government organization in the U.S. whose sole responsibility is to collect national taxes. KuCoin also represents a global leading cryptocurrency exchange company, which is been explored across 207 regions and countries; having over 8 million registered users around the world, having also supported over 800,000 trades.
What’s IRS’s View as Regards Cryptocurrencies?
This organization is of the view that cryptocurrencies are classified as property for tax purposes; meaning that you incur capital gains and capital losses at any moment you trade, sell or dispose off your cryptocurrency. The organization is of the view that these activities of investment and trade should be reported on your taxes.
What’s Kucoin’s Stance in Respect to IRS’s View?
KuCoin as a crypto exchange company has activities that revolves round the trading and investment of cryptocurrencies, and are subjected to reporting all its taxes and those of its users to the IRS.
However, as it stands right now, KuCoin is not licensed for operation in the United States, yet the company’s privacy policy states that it may disclose personal data if required to do so by a government authority.
Why do Kucoin Finds it so Hard to Report Crypto Taxes?
Just like many other cryptocurrency exchanges, KuCoin had found it so hard to provide its users with complete tax records due to the transferable nature of cryptocurrencies. We have so many crypto investors that use several exchanges and wallets; making use of them many times to transfer cryptocurrency between them.
This means that KuCoin will only have a record of the transactions that actually occurred on its own platform; hence, it is hard for KuCoin and other exchanges to keep the entire record of your cost basis and capital gains.
Read also: How Long Does It Take To Withdraw From Kucoin?
How would you Report Taxes on your Kucoin Transactions?
As KuCoin offers a vast and many crypto investment options that ranges from buying and trading to futures and mining, it might yet be unable to provide tax forms and documents, but the company does provides two easy ways to export transaction and trade history.
The two ways are either through API or CSV file, and KuCoin does this by pairing with Koinly through API or CSV file import to make reporting your crypto taxes easy.
Once they get paired and connected, Koinly now becomes the ultimate KuCoin tax tool, as Koinly calculates your KuCoin taxes based on your location and generate your EOFY tax report, all within 20 minutes.
Hence, all youll just need to do at tax time is to download your KuCoin tax statement from Koinly and file it with your local tax authority, and with this you’re done.
Bottom Line
It is of course necessary to pay taxes on all KuCoin’s activities, in line with IRS demand, because these activities revolve round the investment and trading of cryptocurrencies.
Besides, as KuCoin had provided means to get a complete tax report, you must know that the exchange company has separate files for trades and orders, with a CSV export limit of 5 CSV files every 24 hours.
This doesn’t mean a big problem for many users, but if you have many transactions that spans through a long period of time, you must not leave your tax returns until the last minute. It is also possible to get one simple file instead of multiple ones as requested by you from KuCoin support.
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Idris Yau is an entrepreneur and a seasoned finance and marketing content writer. He brings you unbiased reviews about products and answers to your finance questions.
