Crypto Tax Calculator

A token swap occurs when a token decides to change its ticker symbol for a particular reason. This could be due to a chain split (e.g., a hard fork) or if a project just decides to change its name (and therefore change the ticker symbol as well).

A redenomination occurs when the value of a token is recalibrated due to a change in the buying power of a currency.  For example, on the 21st of August 2020, Polkadot underwent a redenomination of 1 : 100 - this means that if you had 1 DOT before that date, you then had 100 DOT after. Consequently, the price per DOT is divided by 100 which means the buying power remains the same for DOT holders.

Sometimes, tokens undergo both a token swap (i.e., ticker symbol change) and a redenomination at the same time. This change does not show up on the blockchain which means that we need to make some manual amends in order to reflect the token swap or redenomination or both!

NOTE: most taxation offices have not recognized a token swap or redenomination. You can discuss with your accountant how to best handle this transaction or even reach out to your taxation office's support team to get their view on this.

Let's go through an example. On March 30th, 2021 - NPXS underwent both a token swap and redenomination to become the new token PUNDIX. The redenomination ratio was 1000 : 1 - which means that 1000 NPXS was exchanged for 1 PUNDIX.

In order to reflect this transaction in our system, we have a couple of suggestions. At the time of the migration, you can add in:

A swap transaction. Please see our guide here: <a href="https://help.cryptotaxcalculator.io/en/articles/6188320-swap-category">Swap Category</a> - Option 1

Alternatively, you could add in a 'lost' transaction for the old token and the new token as 'chain split' - Option 2

1. A swap transaction. Please see our guide here: <a href="https://help.cryptotaxcalculator.io/en/articles/6188320-swap-category">Swap Category</a> - Option 1
2. Alternatively, you could add in a 'lost' transaction for the old token and the new token as 'chain split' - Option 2

To add this manual transaction (Option 1):

Log into your CryptoTaxCalculator account and head to the 'review transactions' page, then the top right corner 'add transaction':

Enter the details to reflect the token swap and/or redenomination:

Once this is added, you can then apply the 'Swap' to the 'Trade' - as seen in our guide under 'How to Apply a Swap to a Trade': <a href="https://help.cryptotaxcalculator.io/en/articles/6188320-swap-category">Swap Category</a>. This will then change the ‘Trade’ to a non-taxable ‘Swap’.

1. Log into your CryptoTaxCalculator account and head to the 'review transactions' page, then the top right corner 'add transaction':
 
 
 
2. Click 'Trade':
 
 
3. Enter the details to reflect the token swap and/or redenomination: 
 
 
4. Once this is added, you can then apply the 'Swap' to the 'Trade' - as seen in our guide under 'How to Apply a Swap to a Trade': <a href="https://help.cryptotaxcalculator.io/en/articles/6188320-swap-category">Swap Category</a>. This will then change the ‘Trade’ to a non-taxable ‘Swap’.

To add this manual transaction (Option 2):

Then repeat the process but add in a 'chain split' transaction:

1. Log into your CryptoTaxCalculator account and head to the 'review transactions' page, then the top right corner 'add transaction':
 
 
 
2. Click 'Other': 
 
 
3. Add in a 'Lost' transaction:
 

4. Then repeat the process but add in a 'chain split' transaction:

This should then resolve any previous warnings you may have had regarding the token swap or redenomination.

NOTE: we cannot give you any individual advice as to what option you want to go with, this is up to you and/or your accountant.