Staking transactions can be complex with evolving tax regulations. Recently, authorities such as the IRS, ATO, and HMRC have provided clearer guidance on their tax treatment. Crypto Tax Calculator (CTC) offers flexibility in handling the taxation of staking deposits, withdrawals, and rewards.
Note: Consult with your local tax professionals or contact tax authorities to determine the most suitable tax treatment for your circumstances.
Staking Categories
Staking Deposit
You deposited these coins into a staking pool. This acts similar to a withdrawal.
Staking Withdrawal
You withdrew these coins from a staking pool. This acts similar to a deposit. Must not exceed the quantity of the total staking deposit.
Staking Reward
You earned interest from staking.
For more details on the categories, check the following guides:
Staking Deposits and Withdrawals
TL;DR
| Scenario 1 | Scenario 2 |
Transaction | One incoming and one outgoing transaction. | Only one incoming or outgoing transaction. |
Treating it as taxable |
|
Tax settings: non-taxable toggle on |
Treating it as non-taxable |
|
Tax settings: non-taxable toggle off |
We will explain this further in the following sections.
Scenario 1: Depositing a token into a smart contract and receiving another token in return.
This transaction may be considered a sale since you no longer control the original asset. Additionally, price fluctuations, such as impermanent loss, may occur. The new token can sometimes be used as collateral or sold on the market. If this scenario applies to you, categorize these transactions as a Trade (usually auto-categorized).
Note: 'Staking Deposit' and 'Staking Withdrawal' do not suit when you receive another token back. You can either use
'Trade' for a taxable event, or
'Swap' for a non-taxable event.
Scenario 2: Depositing a token into a smart contract without receiving a token in return.
In this case, there will typically be only one outgoing transaction and no incoming transaction. You can categorize this as a Staking Deposit. When withdrawing the staked assets, categorize it as a Staking Withdrawal. To determine if this should be treated as taxable or non-taxable, adjust the "Treat staking deposits and withdrawals as non-taxable" toggle in Settings → Portfolio & Tax → Tax Toggles.
How the tax toggle impacts your reports
Toggle on | Toggle off |
Non-taxable | Taxable |
You maintain the ownership | Disposal of the assets |
Does not change the overall balance | Changes the overall balance |
Check this guide for more details.
FAQs
Q: Why do I see a 'missing purchase history' warning on my staking withdrawal assets? How do I fix it?
When the "Treat staking deposits and withdrawals as non-taxable" toggle is on, the withdrawal amount can not be larger than the deposit amount. If the Staking Withdrawal amount is larger, you will need to add a transaction to reflect the change in balance manually. Otherwise, you will have a balance remaining issue that will appear as a Missing Purchase History as there is no cost basis recorded for the extra amount of the tokens.
For example, if the staking deposit is 100 CAKE, and the staking withdrawal is 130 CAKE, the withdrawal transaction should be edited as below.
A Staking Withdrawal transaction of 100 CAKE
Add a Staking Reward transaction of 30 CAKE
You can also duplicate the incoming 130 CAKE transaction and edit them as above.
Tips: Ensure your Staking Withdrawal quantity > Staking Deposit quantity to avoid a Missing Purchase History warning.
Q: Why don't I see staked asset balances on the Portfolio page or inventory report?
Currently, Staking Deposits and Withdrawals are not shown in your portfolio or inventory report because they are not held in your wallet or exchange accounts while staked.
We are developing a dedicated section within the portfolio to display staked assets. This enhancement is planned for future software updates.
Q: How are staking transactions taxed in Australia?
Read the ATO update about staking transactions here.