3Commas and CryptoTrader.Tax Bring Automatic Tax Reporting To Users
3Commas is a leading provider of smart trading terminals and automated trading bots for cryptocurrency investors. The company integrates with major cryptocurrency exchanges to allow users to trade across multiple exchanges via one, unified trading terminal. One challenge that comes with trading cryptocurrency across multiple exchanges is tax reporting. To solve this challenge, 3Commas has teamed up with CryptoTrader.Tax to bring automated gains and losses tax reporting to their users.
In most countries (including the U.S.), cryptocurrencies are treated as property for tax purposes, not as currency. Just like other forms of property-stocks, bonds, real estate-you incur capital gains and losses tax reporting requirements when you sell, trade, or otherwise dispose of your cryptocurrency.
For example, if you purchased 0.2 Bitcoin for $2,000 in May of 2018 and then sold it two months later for $3,000, you have a $1,000 capital gain. You report this gain on your tax return, and depending on what tax bracket you fall under, you pay a certain percentage of tax on the gain. Rates fluctuate based on your tax bracket as well as depending on whether it was a short term vs. a long term gain. This applies to all cryptocurrencies.
For a deep-dive on how cryptocurrency taxes work, check out our complete guide here.
When traders are buying, selling, and transferring crypto on multiple exchanges, from wallet to wallet, tracking cost basis and fair market value data for all of their trades can quickly become very difficult. This is information they need to report each of their trades on their taxes.
Crypto tax calculators like CryptoTrader.Tax exists to automate the tedious tax reporting process.
As a result of the partnership with CryptoTrader.Tax, 3Commas users now have the ability to automatically create their needed tax reports for any given year. Users can simply import all of their trade histories and generate their tax reports with the click of a button. The 5 step process to report creation is outlined below.
Start out by selecting each of the exchanges and platforms that you have used to buy, sell, trade, or earn cryptocurrency. These are the platforms that you will be importing historical data from.
For each platform selected in Step 1, you will see an option to import historical data from it. Import your data from each of these platforms by connecting your account via API key or by dropping in the transaction history CSV file that your exchange exports. Either option works. Once you have imported data from all of your exchanges, you can move ahead.
Step three is for importing transactions that are not captured at the exchange level. Incoming transactions like receiving coins from mining, staking, interest accounts, or other means should be added as incoming transactions. These types of events result in taxable income. CryptoTrader.Tax generates a complete income report for you detailing all of your mining or staking income that you received over the course of the year in USD, or your home fiat currency, values.
Payments and gifts sent to friends should be added as outgoing transactions within step three.
Once you reach step four, all of your data will be imported into the system. Your data is ordered chrono logic ally to make it simple to review. Make sure that everything is accounted for within step 4.
Lastly, generate your completed tax report with the click of a button on Step 5! Included in your tax report is IRS Form 8949, short and long term sales reports, an income report, as well as a complete audit trail detailing how every single taxable event was calculated. Check out an example cryptocurrency tax report here.
You can import your complete cryptocurrency tax report into tax filing software like TurboTax or TaxAct, send it to your tax professional, or file it yourself!
Originally published at https://www.cryptotrader.tax.
3Commas and CryptoTrader.Tax Bring Automatic Tax Reporting To Users was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.
Author: ampva –
Cryptocurrency Exchanges Security Standard by Hacken
KYIV, Ukraine, July 6, 2020 /PRNewswire/ — The cybersecurity of cryptocurrency exchanges is paramount in today’s increasingly digital world. These platforms are responsible for large amounts of cryptocurrency tokens often worth tens of millions of dollars, belonging to thousands of unique users, making them a prime target for cyber criminals.
To improve the overall safety of all cryptocurrency stakeholders, leading cybersecurity company Hacken has introduced the CER.live platform and CERtified cybersecurity certification standards.
First Industrywide Cybersecurity Certification Standards
Cryptocurrency exchanges are susceptible to major threats such as traditional banking cybersecurity vectors as well as weaknesses posed by inadequate blockchain implementation.
Launched by Hacken in 2018, the Crypto Exchange Ranks (CER.live) was the first platform that set the cybersecurity standards in the cryptocurrency exchanges industry.
The main objective of the CER.live platform and CERtified cybersecurity certification standard is to educate and prevent users from trading at cryptocurrency exchanges who do not invest enough into their traders’ funds security and encourage cryptocurrency exchanges to comply with the cybersecurity standards.
CERtified – Hacken’s Unique Certification Methodology
Hacken’s unique CERtified methodology provides certifications to exchanges ranging from an uncertified exchange to a 3 star certified exchange meeting the most strict cybersecurity criteria.
Certification levels are based on four criteria. The CyberSecurity Score is a combination of server security, user security, crowdsourced security, and historical hack cases. Penetration tests are used to imitate the actions of malicious users attacking the exchange. The aim of the test is to explore possibilities to gain access and control so hese can be fixed. Penetrations tests need to be done on a regular basis as new features get added to exchanges.
As insolvent exchanges can lead to massive financial damage to its users, wallet addresses owned by cryptocurrency exchanges should be disclosed to display their proof of funds. This way, the risk of insolvency can be ranked objectively.
The final criterion in the certification process is the practice of conducting Bug Bounty programs run by external or crowdsourced security providers. Bug bounties are performed by cybersecurity experts and hackers that will aim to detect software and configuration errors that can slip past developers and security teams.
Cryptocurrency exchanges that fulfill all categories above will be certified. To learn more about the certification criteria, read the following blog post.
CERtified Standards Already Adopted By Industry Players
The CERtified methodology and standards are well received and accepted by the cryptocurrency industry. Already, more than 50 cryptocurrency exchanges are ranked in the CER.live platform.
Hacken is also proud to announce that CoinGecko, the world’s leading independent cryptocurrency data aggregator, has updated their Trust Score algorithm for exchanges by incorporating the CER.live Certification and CyberSecurity Score as their data provider. More partners that will adopt the CERtified methodology will also be announced by Hacken in the future.
Hacken is a leading cybersecurity company targeting corporate and consumer markets, Established in 2017, Hacken has since become the global security partner of companies such as VeChain, Oneledger, AirAsia and many more.
Hacken offers a variety of cybersecurity products and services, including the CER.live certification standards for cryptocurrency exchanges, HackenProof bug bounty platform, and the HackenAI consumer cybersecurity protection application.
Hacken recently launched the Hacken Club online community, where cybersecurity enthusiasts share and discuss the best cybersecurity practices, investigations and reveal real scams and frauds in the cyber world.
Join the official Hacken Club Telegram to help protect and secure yourself, your friends and your family at https://t.me/hackenclub.
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Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading
Home Blockchain Kraken-Owned Crypto Facilities Wins UK License to Offer Derivatives Trading