DAFI Staking Query

When staking my DAFI tokens, am I right to assume that the only transaction I need record is the tokens received as reward and classified as Staking? So, I only need show that as a Staking deposit?

Thanks

On www.cointracker.io it says:

" Staking rewards are reported on Schedule 1, Line 8 as “Other income”. Staking income will be subject to ordinary income taxes . When you later sell the tokens earned from staking rewards , the gains will be taxed as capital gains"

Can you explain how Accointing program deals with this please and how I should enter these reward tokens in order for the correct tax calculation to be made

Many thanks

Hi @sja123! Staking should be ok.

Hey guys! I understand your frustration with the staked and staking classifications so just to clear this out from out standpoint:

all tokens that were staked=do not classify
all tokens that came as a reward for staked tokens=staking

The reason why we don’t have more strict guidelines is because there aren’t any and they are subject to the interpretation of the different jurisdictions. That bein said, here is an article from Bloomberg providing further context on the matter:

Now, the lender could be considered to have converted their crypto for another crypto when they “stake” their money into the liquidity pool and received another token they can sell elsewhere. That is a taxable event, so in this example, just as dividends are taxable, so are tokens generated from staking activities.

However, it’s not as straight-forward as that because this transaction can also be viewed in another way; in that what the lender deposited in the liquidity pool is still their money and the tokens they receive in exchange is nothing more than a receipt. That means it is not a taxable event.

Meanwhile, on the borrower’s side, it can be argued that depositing collateral and receiving a loan in a different token form is akin to an exchange transaction, so a taxable event. Of course, usually taking a loan is not a taxable event. However, the transaction on a DeFi is unique. Unlike conventional loans, it includes depositing one currency as collateral to receive a loan in another.

If you need any tax assistance with your crypto taxes, make sure you visit ACTAN in the Hub where any of our crypto tax professionals can help you out.

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