Overview

The Gains API can be used to manage gains and losses related to asset disposals. It calculates gains by tracking disposed tax lots based on your chosen accounting method.

Key Terms

Before we dive into the available actions, let's clarify some key terms:

• Gain/Loss: This is the difference between the sale price of an asset and its cost basis. Gains are typically taxable, while losses can offset gains and reduce taxable income.
• Holding Period: It's the duration an asset is held before being sold. In the US, long-term assets held for over a year receive preferential tax treatment compared to short-term assets.
• Long-Term: For US taxpayers, assets held for more than one year are considered long-term, and they are subject to lower tax rates.
• Short-Term: For US taxpayers, assets held for one year or less are considered short-term, and they are subject to higher tax rates.
• Realized Gain/Loss: These are gains or losses that have been actually realized through the sale or disposition of an asset.
• Unrealized Gain/Loss: These are gains or losses that have accrued due to the fluctuation in the price of an asset but have not yet been realized through a sale or disposition.
• Disposition Method: The Disposition Method (sometimes referred to as the Accounting Method or Cost Basis Method) is used to determine the cost basis of an asset for tax purposes upon sale. See Supported Accounting Methods for additional detail.

Purpose

These endpoints can add value to your tax center. Examples include:

• Power live gain/loss information for your end users
• Give your users granularity into what their short-term vs long-term gains are
• Allow your end users to see their gains over a customized time frames (last month, YTD, all time, etc)

You can use this functionality in the following ways:

• Tax-Efficient Investment Strategies: Utilize short-term and long-term gains data to optimize investment decisions and minimize tax liabilities.
• Comprehensive Tax Reporting: Maintain detailed records of asset disposals with the breakdown of cost bases, proceeds, and gains/losses for accurate tax reporting.
• Periodic Tax Compliance/Reports: Calculate total gains for specified periods to generate quarterly or annual tax reports, ensuring ongoing tax compliance.

Prerequisites

To use this endpoint, you must have:

1. A valid tenant-scoped bearer token
2. Users who have been created in TaxBit's system

Not required but strongly recommended to receive meaningful information:

1. Users must have at least one disposal of a non-fiat asset (sell, trade)

Available Actions

1. Get Short, Long, and Total Gains/Losses: Retrieve short-term, long-term, and total gains for your asset disposals.
2. Get Individual Gain/Loss Item Details: A detailed breakdown of all combined cost bases, proceeds, and gains/losses. These correspond to line items on an IRS form 8949 or form 1099-B.
3. Get Total Gains/Losses for a User: Get the total gains/losses for a user over a specific period of time.