What is Trust Wallet?
Trust Wallet is a widely recognized crypto wallet that gives users full control of their private keys, allowing them to hold, manage, and trade a variety of digital assets. Since its initial launch in 2017 as an Ethereum-focused wallet, it has expanded to support multiple cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). Binance acquired Trust Wallet in 2018.
Because Trust Wallet is non-custodial, you alone hold your private keys on your device. It also works seamlessly with hardware wallets like Ledger or Trezor for enhanced security. This emphasis on user control and decentralized operations is a big part of Trust Wallet’s success.
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Do I pay taxes on my Trust Wallet transactions?
In the eyes of the IRS, cryptocurrency is treated like property, so you might owe taxes whenever you sell, exchange, or otherwise get rid of your tokens. Here are the main considerations:
Capital Gains or Losses
Selling or swapping your crypto from Trust Wallet may generate capital gains (or losses) based on how much you paid for the tokens (your cost basis) compared to what you received when you sold or traded them.
Income Tax
Crypto you receive through staking, mining, airdrops, or as payment for services generally counts as ordinary income and should be reported as such once you have control of the coins.
Reporting Requirements
The IRS requires detailed reporting of crypto transactions on Form 8949 and Schedule D. This typically involves listing acquisition dates, sale dates, proceeds, and cost basis for each transaction.
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Do crypto wallets report to the IRS?
Non-custodial wallets, like Trust Wallet, usually do not submit user transaction data to the IRS. Since you control your own keys (and Trust Wallet doesn’t manage customer assets), the wallet itself is not in the same category as a centralized exchange that may report user data to tax authorities.
However, even though Trust Wallet doesn’t file reports on your behalf, you still need to follow IRS rules. It’s up to you to detail any capital gains, losses, and any crypto-related income. To keep things organized, you can use specialized software or consult tax professionals (like our team at TokenTax) to accurately record each trade, transfer, or sale in Trust Wallet.
Learn more: Does Trust Wallet Report to the IRS?
Can the IRS view my Trust Wallet transactions?
Even though Trust Wallet doesn’t report user activity, blockchain transactions are typically public. The IRS can use blockchain analytics tools to match wallet addresses to individuals. In some cases, they issue John Doe summonses to crypto companies to uncover users who might not be reporting income or gains. Make sure your records match all on-chain activity to stay on the right side of the law.
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Using TokenTax’s API integrations with Trust Wallet
Because Trust Wallet stores your crypto on a chain that TokenTax supports (like Ethereum or BNB Smart Chain) you can connect via API by simply entering your public addresses within TokenTax. Our platform will retrieve your transaction history automatically, eliminating the need for manual CSV uploads.
Once your Trust Wallet data is synced, TokenTax will handle each transaction’s cost basis and gains calculations, generating the necessary tax forms. This approach saves time, reduces errors, and ensures your Trust Wallet activity is accurately reflected in your overall crypto tax picture.
Is Trust Wallet safe?
Security is a major selling point for Trust Wallet, as it ensures you hold your own private keys. You can also add another layer of safety by connecting a hardware wallet like Ledger or Trezor.
Still, it’s crucial to keep your recovery phrase under wraps, maintain secure devices, and only use official Trust Wallet sources. If you spot suspicious links or get asked to share your seed phrase, don’t do it.
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