Tax reporting and portfolio tracking are likely two of your least favourite activities as a trader. It can be difficult enough to keep track of your trade entries and exits in addition to analysing the performance of your trades. You may find yourself forgetting to record all of your trades or neglecting to carry out some of the other important activities related to tax reporting and portfolio tracking. This is why we have developed a specific training course for traders on these topics. It is all about simplifying tax reporting and portfolio tracking, allowing you to maintain your focus on trading without having to worry about being caught off guard.
1. Tax Reporting At The End Of The Year
One of the most important things that you need to do at the end of the year is to review your trades and determine which ones result in taxable gains. It is also a good idea to keep track of your realised and unrealized gains throughout the year so you can use them as your best crypto tax software. You should know how much it costs to sell everything that you own at least within a reasonable margin of error. This will help you determine how much profit is left after taxes are deducted.
2. Report Your Transactions
One of the first things that you need to do is to report all of your trades that have realized gains or losses. This will help you when you go to calculate your long term capital gains and losses. You will need to indicate how many shares of each security were sold, at what price, date that the sale occurred and the total realized amount. You also need to make sure that you document the purchase prices for all of your stocks. You will want to keep these records in case you ever have a tax audit.
3. Paying Capital Gains Tax When You Sell Your Assets
One of the main things that you will need to do as you sell your assets is to determine how much you have in capital gains. You will want to keep track of all your purchases and sales throughout the year so that you can determine your basis on the date that these trades are reported. You will basically want to use the sales proceeds from the sale as the sales price for each security so that you can calculate your capital gains tax.
4. Capital Gains Tax
Most traders will sell some of the securities that they hold in their portfolio in order to realise gains at some point. The way that capital gains are calculated is based on the principle of diminishing returns. This is why you want to keep track of your sales proceeds and the date when you sold the security. You will need to use an average cost basis to determine your capital gains tax liability.
Binocs is the most comprehensive and user-friendly crypto portfolio management for traders. It will streamline your reporting and tracking, including the tax reporting that you need to do as a Investor. It will help you to be sure that you are doing all of the things that you need to do in order to keep your risks down and make sure that you are maximising your gains.