How to classify reflections that we get in our wallets from reflecting tokens? As Airdrop or Gifr recived?
What’s a “reflection”? Never heard of that. Which coin has it?
Susanne, “reflection tokens” are almost all tokens on the Binance Smart Chain for example. When you purchase or sell them, you pay a fee and a part of this fee gets distributed to all the other holders of that coin.
Here is the breakdown of classifications: The Different Types of Crypto Transaction Classifications - The Hub: Crypto and Bitcoin Tax Blog | ACCOINTING.com
Here is how you are taxed per classification: https://hub.accointing.com/?s=Specific+tax+classifications&id=3300&post_type=post
Please add the name of specific tokens here and vote here:
As of now, you need to keep track of this manually
So this is a weird case as the laws are not specific in this area, though I am unsure of your country as well. Therefore it is up to the user to classify as they want depending on how they chose to treat this kind of transaction. For example, with loans, the collateral should not be taxable, therefore, it should be an internal transfer as if it was staking, but the keyword is should. if someone wants to be super conservative they could do it as a trade. Similar to a LP, you can treat as a deposit or taxable event, or as if you are staking.
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