Does Metamask report user trades to the Tax Agency?

[JSA]

Last year I did some work for a DAO and was rewarded with governance tokens for my participation. I just claimed the tokens, transferred them to my Metamask wallet, and then exchanged them for ETH to cash out directly to my debit card. The total was about $3K—not a huge amount.

I’m wondering, does Metamask report these transactions to the tax agency? Or is it solely on me to report this as income for tax purposes?

Would appreciate any insights on how this works!

 

[daniels27]

Last year I did some work for a DAO and was rewarded with governance tokens for my participation. I just claimed the tokens, transferred them to my Metamask wallet, and then exchanged them for ETH to cash out directly to my debit card. The total was about $3K—not a huge amount.

I’m wondering, does Metamask report these transactions to the tax agency? Or is it solely on me to report this as income for tax purposes?

Would appreciate any insights on how this works!

They even adjusted their terms to be able to charge withholding taxes. You need to be prepared that if they don't report now, they may have to report within the next 5 years and then will report up to 5 years back.

https://finance.yahoo.com/news/worldwide-tax-standard-includes-cryptocurrencies-090828091.html

 

[JSA]

They even adjusted their terms to be able to charge withholding taxes. You need to be prepared that if they don't report now, they may have to report within the next 5 years and then will report up to 5 years back.

https://finance.yahoo.com/news/worldwide-tax-standard-includes-cryptocurrencies-090828091.html

Hey thanks for the link! Yeah, in that case better pay the tax and then forget about it.

 

[blizz]

Last year I did some work for a DAO and was rewarded with governance tokens for my participation. I just claimed the tokens, transferred them to my Metamask wallet, and then exchanged them for ETH to cash out directly to my debit card. The total was about $3K—not a huge amount.

I’m wondering, does Metamask report these transactions to the tax agency? Or is it solely on me to report this as income for tax purposes?

Would appreciate any insights on how this works!

metamask is trash, avoid them at all costs, there are better services to exchange your coins without reporting.

 

[mistaphi]

Last year I did some work for a DAO and was rewarded with governance tokens for my participation. I just claimed the tokens, transferred them to my Metamask wallet, and then exchanged them for ETH to cash out directly to my debit card. The total was about $3K—not a huge amount.

I’m wondering, does Metamask report these transactions to the tax agency? Or is it solely on me to report this as income for tax purposes?

Would appreciate any insights on how this works!

Unlikely that Metamask will report anything to tax agencies because no KYC is required to use their wallets. That means, they don't know who you are and can't report that you (JSA) received or sent anything. If the tax agencies were to knock on metamask's door and request certain transactions, I'd imagine that they'd comply; but all transactions are on a public blockchain anyway, so why would they bother?

But it's solely up to you if you report that $3K or not. When it comes time to convert it into fiat, that will certainly trigger a tax reporting event and the exchange that you use to convert your cryptos into fiat will report that to the relevant tax agency; and you'd have to be able to reconcile the transaction in your tax return to determine and report capital gains or losses.

 

[wellington]

Metamask record items such as device and ip so yes they have that information which can be cross coordinated with other information domestically

But that’s if there’s scope to look at you as it isn’t simple to cross match due to so many moving parts

Your main concern should be the card issuer as they are usually white labeled over other providers which do the reporting as standard

 

[wellington]

FYI even on chain interactions record your IP via the service provider doesn’t really matter which one you use, same with mobiles and mobiles also record the apps on your devices etc

 

[avalanche]

Metamask record items such as device and ip so yes they have that information which can be cross coordinated with other information domestically

But that’s if there’s scope to look at you as it isn’t simple to cross match due to so many moving parts

Your main concern should be the card issuer as they are usually white labeled over other providers which do the reporting as standard

IP is almost useless if you use obscure VPN. And also most IP are dynamic which are jumbled together with many other households on the internet service provider network. Gov would need to prove that it was your IP contacting exactly that Metamask server in exact moment of time with exact contents of the request. But even then, all HTTPS traffic is encrypted so internet service provider shouldnt have access to it. Hence Metamask would need to store each transaction you made with stamped IP address and exact time stamp and nobody on the same IP should be sending any tx at the given time. After that they would need to cross match the timing of that tx with some unknown request on your end processed by internet service provider and prove that this 200millisecond discrepancy between sent request and received request can be identified as the same request. What if someone used your wifi to send that transaction five years ago? What if you were hosting VPN for someone else?

Furthermore, web apps can only figure out your operating system and browser version, but not exact device ID known as a MAC address (which can also be spoofed btw). But come on, who's keeping these unchanged for 5 years?

Even device probably will be thrown away within that time span.