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When You do this kind of (HFT) trading, how does ones tax returns look like? E.g. I assume you still have to report every trade with its gain/loss to a tax auth
by rixrax 7y ago
When You do this kind of (HFT) trading, how does ones tax returns look like? E.g. I assume you still have to report every trade with its gain/loss to a tax authority?
- TuringNYC 7y agoIANAA, but you file a gigantic "Schedule-D". I have never done it with crypto, but there is standard software to do it for non crypto stuff. I used GainsKeeper: http://www.wolterskluwerfs.com/tax-reporting/solutions/gainskeeper-for-investors.aspx http://www.wolterskluwerfs.com/tax-reporting/solutions/gains... I see they do crypto, but I've never used it for that. For companies, they have entire departments that consolidate trades and construct massive Schedule Ds
- jotakami 7y agoDepends on the nature of the trades. If you are hedging and maintaining a delta-neutral position (very common situation for market makers and arbitrageurs) then technically your trades are part of a straddle, which is reported separately from capital gains. (in the U.S., at least) I learned this because I had a six-figure capital loss on my spot crypto trades, and a slightly larger gain on unregulated futures which do not fall under capital gains. Capital losses can only offset up to $3k in other income, so I was terrified that I’d have to pay taxes on the massive “gain” without being able to count the losses against it. Fortunately, the straddle is the correct way to report this, allowing gains and losses to be matched across instruments that may otherwise fall into different income categories.