Hi, may I know in cardano if I lend my ADA to the borrower with CNT as collateral. I received interest income at the end of the loan term, or receive the CNT if the borrower defaults. In this case does the lending action trigger CGT event?
The ADA I’m lending will leave my wallet but locked in smart contract. no one except for myself as wallet owner can unlock it (reclaim principal+interest or foreclose) at the end. An example lending platform is Lending | Angel Paper.
Hi @Kube_Sandel
I suggest you talk to a Crypto-aware Tax Accountant to see how to treat these transactions.
By default, these should be imported as withdrawals with gains realized on them, but if you wish, you can technically tag the withdrawals as “add to pool” and when you receive the tokens, provided you receive the same tokens, tag them as “remove from pool” and tag the CNT you receive as “reward”. Of course, this is not tax advice. Check out Staking and farming tokens and What are Tags.