Describe the problem:
Often with airdrops you have to pay a fee to get the airdrop. Should that be a trade? Or should it be a withdrawal of ETH marked as “cost”, and a deposit of the airdrop, marked as airdrop?
I can’t remember if UNI required ETH to receive but I will use it as an example since it is a famous example.
$7 of ETH > 20 UNI (trade)
OR
$7 of ETH withdraw marked as cost.
20 UNI deposit marked as airdrop.
Which exchange/wallet is this regarding?
All
How did you import data into this wallet?
Manually for defi, some exchanges are synced.
What have you tried to fix this so far?
I am doing the separated way of doing it. ETH fee marked as cost, airdrop marked as airdrop. I’m afraid that is the incorrect way of doing it.
Airdrops are a tricky transaction type to record in Koinly for tax purposes. The first question you have to ask is whether the value of the airdropped tokens must be treated as income for income tax purposes in your jurisdiction. In the UK, HMRC has stated that it depends on the reason you are receiving the airdropped tokens, as per the following excerpt:
Income Tax will not always apply to airdropped tokens received in a personal capacity. Income Tax may not apply if they’re received:
** without doing anything in return (for example, not related to any service or other conditions)*
** not as part of a trade or business involving cryptoasset exchange tokens or mining*
Airdrops that are provided in return for, or in expectation of, a service are subject to Income Tax.
Most airdrops I receive are not provided to me in return for a past or future service so I don’t tag/label them as “Airdrops” in Koinly in most cases.
Alternatively you can go into Koinly Settings and turn off “Treat airdrops as income?” In this case your “Airdrop” labelled transactions will result in a zero cost base being assigned to the airdropped tokens and the full value of the tokens will be treated as a capital gain when you dispose of the tokens.
As far as fees paid to receive an airdrop are concerned, I believe these should be labelled “Costs” and deducted as expenses for income tax purposes if you are treating the value of the airdropped tokens as income for tax purposes. If you are not treating the value of the airdropped tokens as taxable income, then the fees paid to receive the airdrop should arguably be added to the cost base of the airdropped tokens, thereby reducing the amount of the capital gain realized on the eventual sale or disposition of the tokens. If the fees paid for an airdrop are recorded in Koinly as a stand-alone transaction, adding them to the cost base of the airdropped tokens will be difficult unless you can “Merge” the fee transaction with the airdrop transaction. Or you can label the stand-alone fee transaction as a Cost and manually deduct these Costs from your Capital Gains after you produce your Koinly tax reports.