Axion burnt tokens treated as a Loss for unstaking it resulting in 95% loss of Token quantity?

I staked Axion tokens, which is penalised if withdrawn early. The tokens were burnt last year (about 24million), and I can only withdraw 5% of the tokens of which 95% of them become lost forever. Will I be able to realise this tax loss/will Koinly be able to detect I made about 95% loss, given that I lost most of my Axions forever if I do an early Unstake?! As you can see my cost basis was 11K and it was sent to a burn address, but the tokens are only worth 500 now, and if I unstake and sell itll be worth even less, but I can offset my other gains with this tax loss but I want to ensure Koinly will be able to detect it before I pull the trigger.

I see a button, “Sent to Pool” would i mark that transaction as “Sent to Pool” and than the 1.7million axion i get back as “recieved from pool”?? would it know i lost 95% of the tokens though by doing this, or assume I gained 1.7million tokens on top of the existing pool?

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Hey @ULT

That’s an excellent question!

I will do my best to answer you, however as this borders on tax advice, you will need to check with your local tax authority that the following is permissible :smiley:

So with any staking transactions, you need to mark the Send transaction as “Sent to Pool” and the corresponding Deposit transaction as “Received from Pool”.

Within the pool wallet, you can create a withdrawal transaction of the 95% of tokens which are lost forever, and label this as “Lost”. This transaction will then appear in the Loss section of your report, and you can consult with your accountant how best to offset this.

Or, if you prefer to have the loss realized and directly subtracted from the Capital gains you can edit the worth of the withdrawal to $0, instead of tagging as ‘Lost’.

If you need more help on how to handle this, please get in touch with us at [email protected] :+1:

All the best!

Ali :rocket:

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