Uniswap is the word on everyone’s lips in the new cryptocurrency world. It serves as both a cryptocurrency and a decentralized exchange, so it can be used for two different things.
The platform is built on top of Ethereum, and users can swap and trade ERC-20 tokens using smart contracts. Note that the decentralized exchange only works with tokens that are based on Ethereum, and that all transactions happen on this blockchain.
Before putting their crypto assets in, the traders have to sign smart contracts. A source on CoinGecko says that Uniswap supports 2441 trading pairs and 1852 different kinds of coins.
How IRS Knows You Owe Crypto Taxes
Does Uniswap Report to IRS?
Uniswap hasn’t made it clear if it directly reports to the IRS like Coinbase, Kraken, etc. do, so it could or could not.
To be clear, according to the law, all crypto to crypto trades that result in a profit and all crypto to fiat trades are all taxed. Because of this, all trades on Uniswap are taxed.
Most tax agencies around the world, including the IRS, don’t fully understand or keep track of DeFi protocols like Uniswap.
This means that there are still no clear rules for platforms like Uniswap. However, you still have to pay taxes on gains. As of now, all we need to do is use the crypto laws that are already in place and apply them to DeFi as well.
How to File Taxes with Uniswap?
Before you can start with Uniswap taxes, you need to know what you bought and sold during the tax period. There are, roughly speaking, two ways to do this:
You can connect the wallet you linked to UniSwap to a crypto tax software that will do the calculations for you automatically.
Take the ETH wallet’s public address from Uniswap and enter it into crypto tax software like Koinly or Cryptotrader.tax. This will bring in all of your transactions and figure out your gains, losses, and gains on capital.
If not, you can do it by hand. But keep in mind that you can’t download CSV files from Uniswap, which is different from Trust Wallet. But you can sign in to your wallet through its own app (such as Coinbase, Metamask, etc.) and download the history of transactions from there.
You can also use services like Etherscan to look at the history of Uniswap transactions (by inputting your ETH wallet public address). You can figure out your crypto taxes by hand using this CSV table.
Does Uniswap Give Tax Documents?
No, the platform doesn’t give its users any tax forms or other tax documents. They also don’t give any kind of financial report. You have to get the right tax forms from the government and fill them out with information about your crypto-financial history.
How Do Cryptocurrency Taxes Work?
Don’t forget that cryptocurrency is still in its early stages and that the IRS is working hard to come up with consistent and fair tax rules for cryptocurrency.
The rules of the government say that you should pay taxes on crypto. They think of cryptocurrency as an asset (or piece of property), so the same rules apply.
When you get rid of, sell, or trade cryptocurrency, you would have to pay taxes on the gain. For example, if you buy a cryptocurrency for $10,000 and sell it for $15,000, you must pay taxes on the $5,000 profit.
On the other hand, if you report a loss when you sell cryptocurrency, that loss can be taken out of your total losses. Also, keep in mind that buying cryptocurrency is not something that is taxed. Even if the value of the coin goes up, you don’t have to pay taxes if you buy and keep it.
The IRS has been involved in this area so that investors can pay their crypto taxes in a smooth way. On form 1040, people who own cryptocurrencies must say if they bought or sold any cryptocurrencies that year.
On the other hand, Forbes says that cryptocurrency exchanges give you Form 1099-K if you have more than 200 transactions and more than $20,000 in training in that fiscal year.