I have the MCO Card from the Crypto.com app. I have imported the CSV file into Koinly and I noticed that all of the cashback is showing as rewards. I was wondering if cashback on the card is considered as income similar to staking rewards? I read on NerdWallet that the IRS generally views credit card rewards as discount rather than income (was a slightly older article so maybe this isn’t true today).
did you got an answer? for me the cashback is showing as a rewards
what should we do?
Crypto.com Visa Card is a Debit card so the cashback can’t be handled as credit card cashback. This means that CRO cashback is not handled as, sadly, a discount on payment u make.
My thoughts on this… D.
It is now treating it as an unlabelled deposit, which by default won’t be subject to income tax
Why do you think there’s a difference between debit card and credit card cashback from a tax perspective?
Having spoken to HMRC who didn’t know and then passed to a Tax Specialist call back who then advised me that he didn’t know either IE are Crypto rewards a discount off the purchase or income. He advised I ask the question on their forum, which I did and the question was escalated up to the Crypto Tax Specialists who also didn’t know but advised that the question will be answered when the guidance gets updated so right now its a nothing-burger.
I`m marking crypto rewards as deposits.
The forum is here:
IMO the rewards need to be treated as income as they are paid in Crypto , but the cost base will be 100% at the time they are rewarded (100% costbase means zero tax liability, I recently read that KOINLY by default treat these rewards as income . It makes perfect sense to me .)
. This way you will only pay on any future gains/losses on selling or trading those tokens. .
Hey @MattyJ2009 !
Thanks to everyone for chiming in here, great input!
I just wanted to add that unfortunately there currently isn’t a consensus on that question just yet or at least not that we are aware of. So we would definitely suggest to let your accountant or advisor make the decision here.
In both cases, we will be able to accommodate whichever decision. The good thing about Koinly is that it is modular. The reward label can be added or removed depending on what you decide is the correct route.
More on labels here https://help.koinly.io/en/articles/3663453-what-are-labels
We hope to have more clarity and guidance on this in the future