Question on Earn program & taxes (US)
Hello, I'm new to Gemini Earn, and curious if there's a way that my ETH can earn interest paid in GUSD or similar stablecoin?
Basically, I'm trying to avoid a tax reporting nightmare where I have to list 365 line items each year with the ETH rewards earned each day having a distinct cost basis. How are others handling this?
(If I was paid out in GUSD, I would feel comfortable treating that as equivalent to USD (even though I know it's a security of the crypto flavor), and so not calculating capital gains on the GUS > USD conversion when the time comes. I realize this may not be proper, but it seems reasonable at the moment.)
Edit: I should note: I do realize that Gemini will send a 1099 (more info here), but I actually have to report & pay taxes in more than one country, so hence wanting to minimize line items.
Posted Apr 6, 2021, 4:05 AM UTC
It seems like there's no way to earn a stable coin on ETH, according to this post. So the real question above remains -- how are you all dealing with US tax reporting? Isn't it a nightmare?
I believe gains over $600 will trigger a special form to be provided for tax disclosures
Yep, I agree. That's stated in one of the links I posted.
The challenge is when you eventually sell that cryptocurrency, the cost basis is incredibly complicated, because you're earning a little bit every day at different prices.
Got it - use a crypto accounting software if some sort then. Should make it way easier!