How to Report Kraken Taxes

Kraken users must report all cryptocurrency sales, trades, and income to the IRS on Form 8949 and Schedule D. Kraken issues 1099-MISC forms for US customers who earn over $600 in staking rewards, and starting with tax year 2025, is subject to Form 1099-DA broker reporting under IRC Section 6045. The most reliable way to calculate your Kraken taxes is to export your complete Ledger history and import it into tax software like dTax.

What Kraken Reports to the IRS

Kraken (operated by Payward, Inc.) is a US-registered Money Services Business and complies with IRS information reporting requirements.

1099-MISC for Staking

Kraken issues 1099-MISC to US customers who received more than $600 in staking rewards, referral bonuses, or other non-trading income during the tax year. Under Revenue Ruling 2023-14, staking rewards are ordinary income at fair market value when the taxpayer gains dominion and control.

Form 1099-DA (2025 Forward)

As a centralized exchange meeting the "broker" definition under IRC Section 6045 as expanded by the Infrastructure Investment and Jobs Act (Public Law 117-58), Kraken must report gross proceeds from digital asset sales starting with the 2025 tax year. The IRS will use this data to match against your filed Form 8949.

IRS Summons History

In 2021, the IRS served a John Doe summons on Kraken (Payward, Inc.) seeking records of users who conducted at least $20,000 in transactions during 2016-2020 (case No. 21-mc-80095). This was granted by the US District Court for the Northern District of California. This history underscores the importance of accurate reporting for all Kraken users.

How to Export Your Kraken Ledger History

Kraken's primary export is the "Ledger" history, which provides a complete record of all account activity.

Step 1: Access Your History

Log into kraken.com and navigate to History > Export. Alternatively, go directly to kraken.com/u/history/export.

Step 2: Configure Your Export

Select the following options:

Export type: Ledgers
Date range: Full tax year (January 1 through December 31)
Format: CSV

Click "Submit" to generate the export.

Step 3: Download the File

Kraken will prepare your export and make it available for download. For large accounts, processing may take several minutes. You will receive a notification when the file is ready.

Understanding the Kraken Ledger Format

The Kraken Ledger CSV contains these key columns:

txid: Unique transaction identifier
refid: Reference ID linking related entries (e.g., both sides of a trade)
time: Timestamp in UTC
type: Transaction type (trade, deposit, withdrawal, staking, transfer)
subtype: Additional classification
aclass: Asset class (currency)
asset: The cryptocurrency or fiat currency
amount: Quantity (negative for outflows, positive for inflows)
fee: Fee charged for the transaction
balance: Running account balance

Per IRS Publication 551, fees incurred in acquiring property are added to cost basis. Kraken's fee column allows dTax to automatically incorporate trading fees into your cost basis calculations.

Trades Export (Alternative)

Kraken also offers a "Trades" export that focuses specifically on executed orders. This contains fields like order type, price, cost, and volume. While the Ledger export is more comprehensive, the Trades export can be useful for verifying specific trading activity.

How to Import Kraken CSV into dTax

Step 1: Upload the Ledger CSV

In dTax, navigate to Transactions > Import CSV. Upload your Kraken Ledger export file.

Step 2: Automatic Detection

dTax's parser automatically identifies the Kraken Ledger format and maps each entry. The parser handles Kraken's unique asset naming conventions — for example, Kraken uses "XXBT" for Bitcoin and "XETH" for Ethereum in some export formats, while using "BTC" and "ETH" in others.

Step 3: Transaction Matching

The parser pairs related ledger entries using the refid field. A single trade appears as two ledger entries — one debit and one credit — which dTax combines into a single trade record with accurate cost basis.

Step 4: Review and Calculate

Review the imported transactions for completeness. Then select your cost basis method — FIFO, LIFO, HIFO, or Specific Identification — and generate your tax reports. Under IRS FAQ Q39, Specific Identification requires that you can adequately identify the specific unit of cryptocurrency being sold.

Kraken Margin and Futures Trading

Kraken offers both margin trading and futures contracts, each with distinct tax treatment.

Margin Trading

Margin trades on Kraken involve borrowing funds to amplify your position. The tax treatment is:

Opening a margin position: Not immediately taxable
Closing a margin position: Triggers a capital gain or loss based on the difference between your opening and closing prices
Margin interest: Interest paid on borrowed funds may be deductible as investment interest under IRC Section 163(d), subject to the investment interest limitation (deductible only up to net investment income)

Export your margin trade history separately from spot trades to ensure all positions are captured.

Futures Trading

Kraken Futures (formerly Crypto Facilities) operates as a separate platform. Cryptocurrency futures do not qualify as Section 1256 contracts — per IRS Chief Counsel Memorandum 202124008, virtual currency is not a "regulated futures contract" under IRC Section 1256(g)(1). This means crypto futures gains and losses are reported on Form 8949 like regular capital transactions, without the 60/40 long-term/short-term split.

Kraken Staking Taxes

Kraken was one of the earliest major exchanges to offer staking services, though the SEC's February 2023 enforcement action (SEC v. Payward, Inc.) led Kraken to discontinue staking for US customers and pay $30 million in penalties. If you earned staking rewards before or after this period (Kraken later resumed some staking services), those rewards are fully taxable.

Tax Treatment

Under Rev. Rul. 2023-14, staking rewards are taxable as ordinary income at fair market value at the time you receive them. The taxable event occurs when the rewards are credited to your account — not when you sell or withdraw them.

Cost Basis for Future Sales

The fair market value of staking rewards at the time of receipt becomes your cost basis. If you later sell the staked tokens, your capital gain or loss equals the sale price minus this cost basis. The holding period for capital gains purposes starts on the date you received the staking reward.

Reporting

Report staking income on Schedule 1 (Form 1040) as "Other income." When you subsequently sell staking rewards, report the capital gain or loss on Form 8949. dTax handles both the income recognition and subsequent disposition tracking automatically.

Handling Kraken Transfers

Deposits from External Sources

When you deposit crypto into Kraken from another wallet or exchange, Kraken records it as a "deposit" in your Ledger. This is not a taxable event, but you need to provide the original cost basis from where you purchased the asset. In dTax, you can link deposits to purchase records from other platforms.

Withdrawals to External Wallets

Withdrawals from Kraken to an external wallet are not taxable events, but the withdrawal fee may affect your cost basis. The Kraken Ledger records both the withdrawn amount and the fee, which dTax captures for accurate tracking.

Common Kraken Tax Issues

Asset Name Mapping

Kraken uses non-standard ticker symbols in some exports (e.g., XXBT instead of BTC, ZUSD instead of USD, XETH instead of ETH). dTax's Kraken parser automatically maps these to standard symbols, but it is worth verifying the mapping after import.

Paired Ledger Entries

Every Kraken trade creates two ledger entries (e.g., -0.5 BTC and +8,000 USD). These must be paired correctly to calculate cost basis. dTax uses the refid field to match pairs, but trades executed in rapid succession may require review.

Fork and Airdrop Distributions

If you received fork tokens or airdrops through Kraken, these appear as "transfer" or "deposit" entries in your Ledger. Under IRS Revenue Ruling 2019-24, airdropped tokens are ordinary income at fair market value when received. dTax flags these distributions for income recognition.

Frequently Asked Questions

Does Kraken report to the IRS?

Yes. Kraken issues 1099-MISC for staking rewards over $600 and is subject to Form 1099-DA requirements starting with tax year 2025. Kraken has also complied with IRS John Doe summons requests — in 2021, Kraken provided records for accounts with $20,000 or more in annual transactions (case No. 21-mc-80095, Northern District of California).

How do I handle Kraken margin trades on my taxes?

Margin trades are reported on Form 8949 when positions are closed. Your gain or loss equals the difference between your closing and opening prices, minus fees. Interest paid on margin borrowing may be deductible under IRC Section 163(d) as investment interest expense, limited to your net investment income. Export your margin trade history from Kraken and import it into dTax, which calculates the gain or loss for each closed position.

How is Kraken staking taxed?

Kraken staking rewards are taxable as ordinary income at fair market value when credited to your account, per IRS Revenue Ruling 2023-14. Report staking income on Schedule 1 of Form 1040. The fair market value at receipt becomes your cost basis for future capital gains calculations when you sell the staked tokens. dTax tracks both the income event and subsequent dispositions automatically.