CoinTracker tracks margin trading by recording realized profit and loss using 3 dedicated transaction types: Margin Fee, Margin Gain, and Margin Loss.
CoinTracker currently supports automatic categorization for margin transactions on Kraken, Binance, Hyperliquid, and Avantis. Margin transactions on other platforms may require manual categorization and, in some cases, manually creating the transactions to represent the Margin Gain or Margin Loss.
For an overview of how margin trading works and how it’s taxed in the US, see Crypto margin trading in the U.S.
How does CoinTracker categorize margin transactions?
CoinTracker uses 3 dedicated transaction types to record margin trading activity:
- Margin Fee — a payment made to execute a margin transaction, or to cover rollover fees for keeping a position open over time.
- Margin Gain — profit earned when a margin trade is settled.
- Margin Loss — a loss incurred when a margin trade is settled.
Margin Fees, Margin Gains, and Margin Losses net together to represent the total profit and loss for a margin position.
Please note: Exact treatment may vary by the trading platform.
What should I do if my margin transactions are mislabeled?
You can manually update the transaction category for any margin transaction. If your margin transactions are not importing correctly from a supported platform noted above, contact CoinTracker Support for help.
How does CoinTracker calculate the tax impact of margin trading?
Margin gains and losses follow the same core rules as regular crypto trades — proceeds minus cost basis equal capital gains — with the difference being borrowed funds and the risk of liquidation.
Opening a position
Opening a margin position is generally not a taxable event, provided funds do not leave your wallet.
Fees paid to open the position are the exception: if the assets used to pay the fee have a cost basis lower than their fair market value (FMV) at the time of payment, disposing of those assets may result in a capital gain.
Closing a position
When you close a margin position:
- A profit may be treated as a capital gain.
- A loss may be treated as a capital loss.
- A liquidation may be treated as a capital loss.
Margin Fees and Liquidated Collateral
Disposing of assets as Margin Fees or through liquidation can trigger a separate taxable event:
- If assets used to pay Margin Fees are disposed at a higher FMV than their cost basis, the difference may result in a capital gain.
- If collateral is liquidated at a higher FMV than its cost basis, the difference may result in a capital gain.
Margin positions often require margin rollover fees to keep the position open; these are also treated as Margin Fees in CoinTracker.
Disclaimer: CoinTracker is provided for informational purposes and is not intended as tax, audit, accounting, investment, financial, or legal advice. For financial, tax, or legal advice, please consult your own professional. See our full disclaimer.