Crypto Margin and Futures Trading Taxes

Leveraged crypto trading is where generic crypto tax guides stop being useful. The underlying rules still apply, but a margin position generates events that a spot guide never has to describe, and some of them have no settled answer.

This guide separates the parts that follow directly from established treatment from the parts where you are taking a position.

Borrowing is not a disposal

Taking a loan against crypto you own is generally not itself a taxable disposal, because you have not disposed of the asset. That is the starting point and it is what makes leverage attractive.

What matters is what happens to the collateral afterwards. If the platform rehypothecates it, or if the loan is structured in a way that transfers ownership rather than security, the analysis changes. Read what the platform actually does with your collateral rather than what the marketing says.

Liquidation is a disposal

This is the item that surprises people most, and it is not really ambiguous. When a position is liquidated, the collateral is sold. A forced sale is still a sale, and it triggers gain or loss measured against your cost basis in the units sold.

The practical cruelty is that a liquidation in a falling market can produce a taxable gain, if the collateral had appreciated substantially since you acquired it. You lost the position and you owe tax on it. Traders who model liquidation as purely a loss event routinely under-reserve.

The venue split

Regulated US futures and options on commodities have their own long standing tax treatment, which differs from ordinary capital gain treatment in both rate blending and timing. Whether a given crypto derivative falls inside that regime depends on what the instrument is and where it is traded, not on what it is called.

A perpetual swap on an offshore exchange is not the same instrument as a regulated futures contract, even though both give you leveraged exposure. Treating them identically because they feel similar is the most common error in this area, and it can be wrong in either direction. If you trade size on regulated venues, this is a question for a professional on your specific contracts.

Funding payments

Perpetual contracts exchange periodic funding between longs and shorts. Payments received are a receipt with a character that has to be determined, and payments made are a cost whose deductibility depends on that character and on whether your activity rises to a trade or business. There is no bright line answer here that applies to everyone, and anyone offering one is guessing.

What you can do is capture every funding payment with its timestamp and value, so that whichever treatment you adopt can be applied consistently and evidenced.

Where the ordinary rules still bite

• Closing a leveraged spot position by selling the underlying is an ordinary disposal, with short term treatment at ordinary rates up to 37% if held one year or less, and 0%, 15% or 20% beyond that.
• The wash sale rule applies to stocks and securities rather than crypto property, so as of 2026 a repurchase does not disallow a crypto loss. This has been repeatedly proposed for change, and it may not apply the same way to instruments that are securities.
• Losses offset gains, with up to 3,000 dollars of net loss usable against ordinary income each year.
• Cost basis is tracked per wallet or account under Revenue Procedure 2024-28.

What to keep

Position opens and closes with timestamps, every funding payment, every fee, every liquidation with the units and prices involved, and the collateral movements underneath. Derivative venues produce high event volumes and often poor exports, and reconstructing a leveraged year from memory is not possible.

Our crypto trading tax guide covers spot disposals in full, and US crypto tax covers the rates and forms these events feed into.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.