Crypto margin trading and perpetual futures are leveraged positions, common on offshore platforms, whose gains and losses are generally taxed as capital gains and losses when positions close, with funding payments treated as income or expense.
U.S. regulated crypto futures may qualify for Section 1256 treatment (60 percent long-term, 40 percent short-term, marked to market at year end); offshore perpetuals generally do not. Liquidations are dispositions.
Why it matters: offshore platforms issue no tax forms, so the taxpayer’s own records are the only records, and the account itself may trigger FBAR reporting.
IRS crypto audits and letters, unreported years, theft loss opinions, and returns that survive an audit.
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Definitions are general information, not legal advice, and may not reflect the most recent changes in law.
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