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Question about Filing Taxes and Tax returns

#1

Hello wise people . I have a question We all need to file taxes (atleast I have to :smiley:)

  1. I have earned some staking rewards in the staking account which get automatically compounded. ( Through provide functionality) . It’s mostly in privacy coin . I have a few trades as well in incognito app where I was converting between privacy , Bitcoin and usd. (Not more than 100 $).

Question is I need some guidance on how to file or what to file for taxes.

WHEN Should staking profits be reported ? Should they be reported only if I withdraw my rewards and convert it into USD ? I’m a bit unclear on even the right questions to ask .

#2

I think there is some ambiguity here. I am not a CPA, but I think that if you were to remove your profits from provide once an month and mark it as monthly income that would make sense to me. A lot of the tax laws are different country to country, so you really ought to double check with your country. I know that NZ and Australia have very specific laws about staking income, where as the US is mostly what you to report all you income. Obviously speak with a professional, keep good records and be honest and you’ll be fine.

#3

Thanks . I’m more interested in the US side of things. I will have to check with a professional.

But generally does this mean rewards that are not withdrawn from the staking provide account need not be taxed until they are withdrawn ?

#4

I’m fairly certain that the US is a bit late to the party in terms of how to tax a transaction that is continually being paid to you, and even more so if that asset is continually changing in price, however I’m also fairly certain that you need to claim the value of the PRV tokens you’re given as income. This is why i say just withdraw PRV from provide once a month and keep track of how much you’ve made. As the cost basis is continually changing, and the amount earned is continually changing, doing the cost basis is beyond my expertise, but if you read any number of crypto-tax related articles, they all say the same thing, if you make a honest effort to provide all the information and make reasonable judgements about how much you got paid that month, like averaging the price of PRV that month and depositing that lump sum into your wallet, then you should be fine. Hope that helps

#5

Good real world and accurate advice…make a good faith effort at reporting transactions. A regular withdraw from provide and recording the number of PRV and the USD value would be a good way to do this.