How to Do Your Balancer Taxes

How To Do Your Balancer Taxes

CoinLedger imports Balancer data for easy tax reporting. Create the appropriate tax forms to submit to your tax authority.

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Balancer Tax Reporting

You can generate your gains, losses, and income tax reports from your Balancer investing activity by connecting your account with CoinLedger. Connect your account by importing your data through the method discussed below.

Balancer exports a complete Transaction History file to all users. Simply navigate to your Balancer account and download your transaction history from the platform.
Import your transaction history directly into CoinLedger. Import the file as is. No manual work is required!
CoinLedger automatically generates your gains, losses, and income tax reports based on this data.

File these crypto tax forms yourself, send them to your tax professional, or import them into your preferred tax filing software like TurboTax or TaxAct.

Balancer Tax Reporting

Balancer supports importing data via read-only API. This allows automatic import capability so no manual work is required.
Connect CoinLedger to your Balancer account with the read-only API.
Let CoinLedger import your data and automatically generate your gains, losses, and income tax reports.

File these crypto tax forms yourself, send them to your tax professional, or import them into your preferred tax filing software like TurboTax or TaxAct.

Balancer Tax Reporting

You can generate your gains, losses, and income tax reports from your Balancer investing activity by connecting your account with CoinLedger. There are a couple different ways to connect your account and import your data:

Automatically sync your Balancer account with CoinLedger via read-only API. This allows your transactions to be imported with the click of a button.
Upload your Balancer Transaction History CSV file to CoinLedger. You can download your Transaction History CSV directly from Balancer and import it into CoinLedger

Both methods will enable you to import your transaction history and generate your necessary crypto tax forms in minutes. File these forms yourself, send them to your tax professional, or import them into your preferred tax filing software like TurboTax or TaxAct.

Balancer Tax Reporting

Automatically sync your Balancer account with CoinLedger by entering your public wallet address. This allows your transactions to be read in directly from the blockchain.
Upload a Balancer Transaction History CSV file to CoinLedger

Balancer Tax Reporting

Navigate to your Balancer account and find the option for downloading your complete transaction history.
Import your transaction history directly into CoinLedger by mapping the data into the preferred CSV file format.
CoinLedger automatically generates your gains, losses, and income tax reports based on this data.

File these crypto tax forms yourself, send them to your tax professional, or import them into your preferred tax filing software like TurboTax or TaxAct.

How Cryptocurrency Taxes Work

Cryptocurrencies like bitcoin are treated as property by many governments around the world—including the U.S. Other forms of property that you may be familiar with include stocks, bonds, and real-estate.

Just like these other forms of property, cryptocurrencies are subject to capital gains and losses rules, and you need to report your gains, losses, and income generated from your crypto investments on your taxes.

For a complete and in-depth overview, please refer to our Complete Guide to Cryptocurrency Taxes.

How To Do Your Crypto Taxes

To do your cryptocurrency taxes, you need to calculate your gains, losses, and income from your cryptocurrency investments in your home fiat currency (e.g. US Dollar, Australian Dollar, etc.).

Once you have your calculations, you can fill out the necessary tax forms required by your country. If you are in the United States, you can learn which forms you need to fill out with our blog post: How to Report Cryptocurrency On Your Taxes.

Why Can't Balancer Generate My Tax Forms?

Many cryptocurrency investors use additional exchanges, wallets, and platforms outside of Balancer. Perhaps you also trade on Coinbase or earn interest from BlockFi. The trouble with Balancer's reporting is that it only extends as far as the Balancer platform. If you use additional cryptocurrency wallets, exchanges, DeFi protocols, or other platforms outside of Balancer, Balancer can't provide complete gains, losses, and income tax information.

How Does Cryptocurrency Tax Software Help?

By integrating with all of your cryptocurrency platforms and consolidating your crypto data, CoinLedger’s cryptocurrency tax software and crypto portfolio tracker are able to track your profits, losses, income, and generate accurate tax reports in a matter of minutes.

You can test out the software and generate a preview of your gains and losses completely for free by creating an account.

Learn more about how CoinLedger works here.

Trying to file taxes on your Balancer transactions?

DeFi taxes can be hard to navigate — even for experienced investors. Since most DeFi protocols don’t provide tax forms, investors often spend hours of time and effort finding the information they need to accurately report their taxes.

In this guide, we’ll break down everything you need to know about how Balancer transactions are taxed. We’ll also share a 3-step process that can help you calculate your Balancer taxes in minutes.

What is Balancer?

Balancer is a DeFi protocol that allows users to buy, sell, and trade cryptocurrencies. The protocol was founded in 2018 by Fernando Martinelli and Mike McDonald.

Unlike traditional exchanges, Balancer doesn’t rely on centralized market makers to facilitate trades. Instead, Balancer uses decentralized liquidity pools, where tokens are provided by users.

While exchanges like Uniswap limit their liquidity pools to 2 assets, Balancer’s liquidity pools can support up to 8 crypto-assets at a time. No matter how the price of each cryptocurrency fluctuates over time, Balancer’s smart contracts ensure that each asset continues to have an equal weight in the liquidity pool.

How is cryptocurrency taxed?

Before we jump into how you can file your Balancer taxes, let’s briefly review the basics of cryptocurrency taxation.

Cryptocurrency is subject to capital gains and ordinary income tax.

For more information, check out our guide to how cryptocurrency is taxed.

How are DeFi protocols like Balancer taxed?

While the IRS hasn’t put out explicit guidance on how DeFi is taxed, we can reasonably assume the following based on previous guidance.

Crypto-to-crypto swaps and other taxable disposals will be subject to capital gains tax.
Earning crypto income will be subject to income tax. It’s likely that earning BAL tokens as a liquidity pool provider will fall into this category.

For more information, check out our guide to DeFi taxes.

How are Balancer gas fees taxed?

Did you pay gas fees while using Balancer? Gas fees that are directly related to acquiring or disposing of cryptocurrency can reduce your capital gains tax.

For more information, check out our guide to how gas fees are taxed.

How do I track my Balancer transactions for tax purposes?

To file your taxes, you’ll need the following information.

The type of cryptocurrency you disposed of
The amount of cryptocurrency you disposed of
The date you originally acquired your crypto
The date you sold or disposed your crypto
Your proceeds from disposing of your crypto
Your cost basis for acquiring your crypto
Your capital gain or loss

At this time, most DeFi protocols don’t provide tax forms for users. As a result, it’s your responsibility to track this information for tax purposes.

Crypto tax software like CoinLedger can help. No matter how many Balancer transactions you have, you’ll be able to import your transactions and calculate your taxes with just a few clicks.

How to report your Balancer transactions on your tax return

With CoinLedger, you can report your Balancer transactions on your tax return in just three simple steps.

1. Within the CoinLedger platform, select ‘Import’ and select the option ‘Ethereum Wallet’.

2. Copy and paste the wallet address that you used to conduct trades/provide liquidity to Balancer.

3. CoinLedger will automatically import transactions you conducted with your Ethereum wallet — including Balancer transactions!

And that’s it! Once you import your other cryptocurrency transactions, you’ll be able to generate a comprehensive tax report with the click of a button.

Get started with CoinLedger

Want to get a head start on the tax season? With CoinLedger, filing your crypto taxes has never been easier.

With CoinLedger, you can automatically import transactions from hundreds of exchanges and blockchains. Get started today and see for yourself why more than 300,000 investors across the globe trust CoinLedger.

Get started with a free CoinLedger account.