How to correctly tag lending transactions

Hi,

I have a few questions regarding how to correctly track things:

  1. How do I tag a transaction when I lent some coin from venus or aave? Just leave it as a deposit?
  2. How do I tag a transaction when I pay back a loan? Usually it is just 1 transaction that gets auto imported via the wallet but it consists of the interest I paid and the amount. For example I lend 1000 USDT and then I return 1020 USDT in 1 transaction. I could delete the auto imported transaction and make 2 manual out of it. But how to tag the payback? Just leave it as withdrawl?

Thanks

In the Review page, you have other classifications @benny739 :

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Thanks for your help. I saw these classifications but they do not make a lot of sense imho. There is no Lending income in Defi. In Defi you lend a coin and get some other coin back, so it’s always a trade. For example in Venus I lend USDT and therefor I get vUSDT. And later I can change vUSDT back to USDT and the new USDT amount is my old amount including interest. Just check the video: Lending And Borrowing In DEFI Explained - Aave, Compound - YouTube
So on the deposit side we would need sth like “Loan” to make clear, this is a loan that was deposited. And on the withdraw side we need sth like “Loan settled” and interest paid (which is already there). Because the payback is always 1 transaction including the interest, best thing would be to set the interest in the payback transaction as fees. Just not sure if this is ok from a tax standpoint. But manually splitting 1 transaction in 2 doesn’t sound like a good think imho.
These classifications feel a little like someone tried to model classical financial transactions in the tool, but defi works a little different. So e.g. Lending as outflow doesn’t make sense, because Lending in Defi will always give you some other coin back (= trade). But “Staking” would make sense instead of lending, because often to stake a coin you have to send them to a pool.

Hi @benny739! Thanks for you input and feedback. There aren’t any concreted definitions for what is what from the perspective of tax authorities for DeFi. We have defined them based on what works best from the users perspective. We will take note of your suggestions in case we see any discrepancy between our take and yours.

Hi @Rod , thanks for your help. So right now, there is no way to say “this was a loan” and “this was the payback of a loan”?

Hi @benny739. For me:
lending income= payback of a loan
lending=this was a loan

HI @Rod . Thanks, it looks like I misunderstood the tags. Can you please confirm, that “lending income” is not producing a taxable event? Do you have a documentation about the tags and their meaning somewhere?

Hi! We do. Please go here: How To - Accointing Blog - Cryptocurrency Portfolio Tracking & tax Software