Resources/exchanges/FTX Tax Guide

FTX Tax Guide

What is FTX?

FTX Exchange is a leading centralized cryptocurrency exchange specializing in derivatives and leveraged products. Founded in 2018 by MIT graduate and former Jane Street Capital international exchange-traded funds trader Sam Bankman-Fried, FTX offers a range of trading products, including derivatives, options, volatility products, and leveraged tokens.

What are the benefits of using FTX?

  • The fees for trading on FTX are among the lowest out of the popular exchanges
  • Offers more complex trading opportunities like margin trading and derivatives such as futures.
  • Offers trading in 21 cryptocurrencies.
  • Has 27 trading pairs, with additional options available if you’re interested in trading in multiple fiat, or traditional, currencies.
  • Allows users to use their own digital wallets to transfer cryptocurrencies onto and off of its platform.

How do crypto taxes work?

Investing in cryptocurrency incurs different tax liabilities and these might be in the form of Capital Gains Tax (CGT) or Income Tax. However, the type of tax payable and the quantity will depend on the specific features of the transaction such as the type of transaction made, as well as the entity making the transaction (i.e. business vs. individual).

Capital Gains Tax refers to the tax paid on a capital gain made from the sale of a capital asset. Specifically, capital gain (or loss) = capital proceeds (price that the capital asset was disposed of for) – cost base (price it was purchased for).

Therefore, different transactions involving the disposal of cryptocurrency may give rise to a ‘Capital Gains Tax Event’ and result in some CGT payable (depending on the guidelines in your region).

What records do you need to keep to do your FTX taxes?

Whether you are a business, investor or personal user of cryptocurrency, remember that crypto gains or losses are taxed. Therefore, to accurately calculate your tax liability – it is important to maintain records of all your cryptocurrency exchanges.

For most taxation regulatory bodies, you need to keep the following records in relation to your cryptocurrency transactions:

  • the date of the transactions
  • the value of the cryptocurrency in your local currency at the time of the transaction (which can be taken from a reputable online exchange)
  • what the transaction was for and who the other party was (even if it’s just their cryptocurrency address).

The sorts of records you should keep include:

  • receipts of purchase or transfer of cryptocurrency
  • exchange records
  • records of agent, accountant and legal costs
  • digital wallet records and keys
  • software costs related to managing your tax affairs

Keeping good records will make it easier to calculate and meet your tax obligations, and if you are in business, they will assist you to manage your cash flow and see how your business is doing.

You can use an accountant or third-party software to help meet your record-keeping obligations and working out your tax.

As you can see there is a lot of record keeping requirements, and this can be painful to manage. For example, if you traded Bitcoin for Ethereum you are required to record both sides of the transaction back to the value of your local currency, and declare any applicable taxes. If you were to do this manually it can literally take days, but luckily CryptoTaxCalculator is here to help automate this for you.

How to import FTX data into CryptoTaxCalculator

CryptoTaxCalculator has made it really easy to account for your transactions on FTX by offering a direct import of the relevant CSV files, or via API keys. You can then easily calculate your financial year's short and long-term gains using various in-app inventory methods.

For importing via CSV, follow these steps:

  1. In the top right click on your username
  2. In the dropdown menu select trade history
  3. Click the 'Download CSV' button and upload to CryptoTaxCalculator
  4. If you traded future products you will need to import your PnL statement
  5. Click on your username and select 'PnL'
  6. Adjust the start time to the date you started trading
  7. Click the 'Download CSV' button and upload to CryptoTaxCalculator
  8. This will upload income earned from trading futures such as margin/perpetual contracts

For importing via our FTX API integration, follow these steps:

  1. Log in to your FTX account and click on the Settings (gear) icon in the top right of the navbar to navigate to your profile (https://ftx.com/profile)
  2. On the left side of the page click on 'Api'
  3. Make sure you have your main account selected
  4. Click the button 'CREATE READ-ONLY API KEY'. This will open a popup window with your newly created API information
  5. Copy the 'API key' and 'API secret' somewhere secure and click 'close' to close the dialogue
  6. You can now use the copied 'API Key' and 'API secret' to sync with your FTX API on CryptoTaxCalculator

The information provided on this website is general in nature and is not tax, accounting or legal advice. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider the appropriateness of the information having regard to your own objectives, financial situation and needs and seek professional advice. Cryptotaxcalculator disclaims all and any guarantees, undertakings and warranties, expressed or implied, and is not liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or Consequential Loss or damage) arising out of, or in connection with, any use or reliance on the information or advice in this website. The user must accept sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information in this website is no substitute for specialist advice.

Shane Brunette

CEO

Shane Brunette founded CTC back in 2018 after dealing with his own crypto tax nightmare. He has worked closely with accountants and tax lawyers to make it easy for fellow cryptocurrency users to be tax compliant.

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