Need Help Understanding Tax Implications of Crypto Transactions

Tax Questions
#1

Hello there,

I am relatively new to the world of cryptocurrency and I am trying to wrap my head around the tax implications of my crypto transactions. I have been using Koinly to track my trades and transactions, but I still have some questions.

  1. How are crypto-to-crypto trades taxed? Do I need to report these trades even if I haven’t converted my cryptocurrency to fiat?

  2. What is the best way to handle airdrops, forks, and staking rewards from a tax perspective?

  3. I have read conflicting information about whether cryptocurrency gifts are taxable. Can someone clarify this for me?

  4. Are there any tax reporting requirements specific to decentralized finance (DeFi) transactions?

Also I have gone through this post: https://koinly.io/guides/crypto-tax-india/devops which definitely help me out a lot.

I would appreciate any guidance or resources you can provide to help me better understand the tax implications of my crypto activities

Thankyou in advance for your help and assistance.

#2

Hey @rich1

I hope you’re well and thanks for your message. :wave:t2:

If you’re new to the crypto world, don’t worry, you’re in good hands. :+1:t2:

I’ll do my best to answer your questions, but I will say we are not accountants so it’s always best to check with your tax authority for anything we aren’t able to answer.

  1. Trading crypto → crypto is taxable, even if it’s not for fiat:

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  2. Rewards, airdrops, mining etc. are taxed at your Individual Tax Rate, you just need to make sure they are tagged correctly in Koinly

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  3. Crypto gifts may be taxable depending on who they are from - https://koinly.io/guides/crypto-tax-india/#how-are-gifts-of-crypto-taxed

  4. DeFi is tricky as the ITD hasn’t released specific information on DeFi transactions yet, so currently, Koinly will treat them as normal cryptocurrency assets:
    https://koinly.io/guides/crypto-tax-india/#defi-income

We do our best to keep up-to-date with each countries tax rules, but as I mentioned before, if you’re unsure it’s best to check with an accountant or the ITD to be sure. :blush:

I hope that helps! Please let me know if you have any other questions or need help with anything else. :+1:t2:

#3

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