Tax for USD Opt-in bonded rewards

[Bluetegu]

Hi,

Kraken offers USD opt-in rewards in you bond the money for 30 days, with relatively high rate (6.5%). The rate is higher than what I can get in my bank account. However, if the rewards are taxed as income and not capital gain, the comparison to the bank interest becomes more complex.

I read the tax approach for USDC and similar stable coins, explaining that rewards are taxed as income. However, for USD, it really makes less sense, as it is not crypto.

I’m submitting tax report to the Israeli tax authorities.

Here are my questions:

• How are Kraken USD opt-in bonded rewards reported via Koinly?

• Is it possible to tax those differently than other staking rewards reported (e.g. tax USD rewards as capital gain while Ethereum as income) in the Koinly report?

Thanks for a great product!
Ron

[Aria_Koinly]

Hi @Bluetegu

These transactions should be imported as rewards in Koinly. You can verify this by checking the transaction type—it will likely be marked as “Reward”, and they will be treated the same way as other staking or lending rewards—as income at the time received.

This is the same as how ETH or other tokens tagged as reward are treated, however, when you sell your ETH, capital gains tax will be realized on the disposal but not on USD.