KuCoin does not report to the IRS, which means that you will need to report any taxable events to the IRS yourself if you’re a KuCoin user in the United States. In the United States, trading cryptocurrencies and earning profits from cryptocurrency investments are subject to tax.
The fact that KuCoin doesn’t report to the IRS might be tied to KuCoin not having a license to operate in the United States. Despite this, KuCoin might provide information about your account on the exchange if government authorities request it.
How to do your taxes if you’re a KuCoin user?
The KuCoin exchange gives users access to a full log of each transaction and movement of funds related to their account. This will give you all the data you need to calculate and file your crypto taxes, at least as far as your activity on KuCoin is concerned.
You can either export your KuCoin transaction history as a spreadsheet (CSV format), or use KuCoin’s API.
Export CSV spreadheet
If you wish to export a CSV of your crypto transactions on KuCoin, head over to the “Deposit & Withdrawal History” section of your KuCoin account. Then, select “Deposits” and click “Export to CSV”. Make sure that you select the timeframe that’s relevant for your tax report.
If you require logs for transactions you made on KuCoin before 2019, you will need to write to KuCoin’s customer service team and request a CSV file of your transaction history.
Use a crypto tax service that’s integrated with the KuCoin API
A more convenient way to calculate your crypto taxes related to KuCoin is to use a crypto tax service that’s integrated with KuCoin’s API (application programming interface). Crypto tax services will automate a large part of the work required to calculate your tax obligations. Examples of crypto tax services that can be used by KuCoin users include CoinLedger and Koinly.
If you want to learn more, make sure to check the exchange’s official guide to doing your taxes on KuCoin.
Crypto-related taxable events in the U.S.
If you’re a United States-based crypto investor, you’ll have to report your profits and crypto trades to the IRS to avoid high penalties, or potentially more serious charges.
Here are the different taxable events related to cryptocurrency, according to the IRS:
- Exchanging cryptocurrency for fiat currency
- Exchanging one cryptocurrency for another (for example Bitcoin to Ethereum)
- Buying goods and services with cryptocurrency
- Earning income in cryptocurrency
The good news here is that simply buying and holding cryptocurrency is not a taxable event. However, if you sell it, or even exchange it for another cryptocurrency, you’ll have to provide information about such events to the IRS.
Crypto taxes in the United States
Transactions involving cryptocurrencies that are subject to capital gains taxes include actions such as selling cryptocurrency for USD at a profit, changing between different cryptocurrencies, or utilizing crypto to purchase goods and services (this is viewed by the IRS similarly to selling the cryptocurrency).
It’s important to acknowledge that capital gains taxes are differentiated as long-term or short-term. Long-term capital gains are subjected to a reduced tax rate. If you kept your cryptocurrency for a period exceeding one year before its sale, this lower tax rate is likely to apply.
Conversely, cryptocurrency-related transactions subject to income tax include activities like receiving cryptocurrency as compensation from your employer, trading goods and services for crypto, engaging in cryptocurrency mining, earning staking rewards, benefiting from airdrops, and other similar actions.
The bottom line — Since KuCoin doesn’t report to the IRS, you’ll have to do your crypto taxes yourself
It’s important to report your crypto investments gains and other crypto-related taxable events to the IRS in order to avoid penalties.
If you’re from the United States and use the KuCoin cryptocurrency exchange, you need to be aware that KuCoin will not be reporting information about your crypto trades and investments to the IRS. This means that you will have to access your cryptocurrency transaction history on KuCoin in order to calculate and file your taxes.
However, some other crypto exchanges do (at least partially) report to the IRS. This includes Coinbase, which reports Form 1099-MISC for certain users.
FAQs
Many cryptocurrency investors have questions related to KuCoin and taxes. Here’s the answers to some of the most commonly asked questions on this topic.
Does KuCoin report to the IRS?
No, KuCoin does not report to the IRS. This means that if you’re a US-based KuCoin user, you will have to calculate and file your crypto taxes by yourself, or use a crypto tax service such as Koinly or CoinLedger to assist you.
What happens if I don’t report my crypto profits on KuCoin?
If you make capital gains by investing in cryptocurrency, or earn profits in another way by using your crypto on KuCoin, you will have to report this information to the IRS if you’re a United States citizen. Otherwise, you could face heavy fines, or even jailtime depending on the scale of the offence.
Do I have to report my crypto profits even if I only earned a small amount?
If you want to avoid potential penalties, you have to report your crypto profits even if you only earned a small amount with your cryptocurrency trading or investing.