Exodus Wallet Taxes - How to Build Your Tax Reports
Exodus Wallet has grown to be one of the most used wallets amongst crypto investors and active traders. In this guide, we discuss how to do your Exodus Wallet taxes and everything you need to know to stay compliant.
Cryptocurrency Taxes 101
In the U.S., the IRS treats cryptocurrencies as property for tax purposes, not as currency. Just like other forms of property—stocks, bonds, real estate—you incur a tax reporting requirement when you sell, trade, or otherwise dispose of your cryptocurrency for more or less than you acquired it for. Other countries like Canada, the UK, and Australia treat crypto very similarly.
In this sense, cryptocurrency trading looks similar to trading stocks for tax purposes.
For example, if you purchased 0.4 Bitcoin for $2,000 in June of 2019 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 for all cryptocurrencies.
Alternatively, if you sold your cryptocurrency for less than you acquired it for, you can write off that capital loss to save money on your crypto taxes.
We go through everything you need to know about crypto taxes in our complete guide here.
Exodus wallet taxes - understanding the problem
Exodus Wallet and all other crypto exchanges and wallet providers typically don’t have the ability to provide users with necessary gains and losses tax reports for a number of reasons. The main issue stems from the core nature of cryptocurrency: transferability.
Because you are able to send crypto like bitcoin into and out of your Exodus wallet, for example sending bitcoin from Coinbase into your Exodus wallet, Exodus has no way of knowing at what cost (cost basis) you acquired that crypto for. Cost basis is essential data you need in the calculation of your crypto taxes.
If Exodus can’t provide me with my needed tax reports, how do I get them?
To properly build out your necessary crypto tax forms, you need to pull together all of your cryptocurrency data that makes up your buys, sells, trades, air drops, forks, mined coins, exchanges, and swaps across all exchanges that you use.
You can do this by hand by exporting all of your trade history files from your exchanges and doing the capital gains and losses transaction for each trade. Each tax event should be recorded on Form 8949 and your net gain should be transferred onto your 1040 schedule D. We walk through the manual reporting process in our article here: how to report cryptocurrency on your taxes.
Cryptocurrency Tax Software
You can also use cryptocurrency tax software like CryptoTrader.Tax to automatically build your necessary gains and losses tax reports.
By connecting all of your exchanges and crypto platforms and importing your transaction history into your account, CryptoTrader.Tax can aggregate all of your transactions and properly assign cost basis values for every one of your taxable events.
The software will do all of the number crunching for you. With a matter of clicks, you can have your crypto tax reports ready to send off to your accountant or import them into tax filing software like TurboTax or TaxAct.
Below is a short video showcasing how you can import your Exodus transactions into CryptoTrader.Tax to generate your tax reports.