How is a bridge correctly classified? For example if I change BNB.RUNE to ETH.RUNE or wrapped BTC to native BTC or vice versa. It should not be a taxable event, right? If it’s a taxable event, is it classified by an OTC transaction or Swap?
Hi and thank you for your response
I don’t know, whether I understand it correctly. E.g. I try to manually define an internal transaction in Accointing for wrapping my native Bitcoin. The wrapped Bitcoin is then e.g. an ERC-20 token, but the “internal” transfer only allows the transaction of the same coin, i.e. I cannot send the native BTC from my BTC-Wallet and receive another coin (in this case the wrapped BTC) in my ERC-20 Wallet with the “internal” classification in Accointing. I can only define one coin for an internal transaction from one wallet to another, otherwise Accointing thinks it’s a Swap or OTC. If I define the internal transaction for wrapped BTC only, Accointing asks for the purchase history of the wrapped BTC. Or do you define an internal transaction of the native BTC, no matter it was actually wrapped during this transaction?
Isn’t it maybe a good idea to implement an additional classification for transactions of wrapping coins or just changing the blockchain of the same coin? You would define the sending and receiving wallet and the coin and the switched/modified blockchains. And according to your country it’ll be handled taxable or not.
I hope it is clearly understandable what I am trying to explain
I personally like the new classification idea, however we need to look into the tax implementations of this.
I will ask our support team what needs to happens. With the current systems I am trying to decide the best way for you to proceed.
Here are some solutions.
MAY MESS UP LONG-TERM holdings for tax classifications. Manually add a withdrawal transactions of the BTC and classify it as Remove Funds (Non-taxable event) Then manually add a deposit transaction of the wrapped BTC and classify it as Add Funds (a non-taxable event). The issue with this is that if you were holding that BTC for more than a year then it would reset the time until you would have a long-term holdings. If you are in America, you are taxed less if you help an asset for more than a year (long-term). If you are not in the US then you may want to do a little research and see your options. If this BTC was already help less than a year, maybe like a few days, then maybe this is option is worth it to you for a quick solution.
You could just keep it as BTC in Accointing’s system and then manually ignore all wBTC transactions and manually replace it with BTC ones. More work but fixes the Long-term holding issue, if that applies to you.
Wait until Accointing creates a new classification for this or some solution. This may take awhile though since we are low on staff at the moment.