May 1, 2022
Koinly is often found on the lists of top cryptocurrency tax reporting software because it does a great job at helping users figure out the taxes associated with their crypto activities. The Koinly tax calculator has recently added Terra wallet into its tax platform as reported by Cointelegraph.
According to Koinly’s head of tax, Tony Dhanjal, the integration of Terra (LUNA) in April 2022 allows LUNA users to record and keep track of their transactions in order to fulfill their tax obligations. He justified the recent action by stating that many users were asking for LUNA support in order to improve their tax-reporting experience.
Why Are Crypto Taxes so Complicated?
In 2014, the IRS classified all cryptocurrencies as digital assets rather than a fiat currency like US dollars. Since then, crypto has been taxed like other capital assets such as stocks, bonds, and real estate—on their capital gains.
Crypto taxes are complicated because there are a number of different ways to acquire and hold cryptocurrency. For example, you may have bought Terra or Bitcoin in exchange, received it as payment for goods or services, or mined it yourself. There are different tax implications for each of these cases.
Moreover, the rules surrounding crypto taxes are constantly changing. That’s what happened in 2018 when the IRS began requiring taxpayers to report their cost basis when calculating their capital gains.
Such changes make it even more difficult to accurately calculate your taxes. But fortunately, there are a number of tools out there to help make the process easier, with Koinly’s services (find the full review of Koinly here) providing one of the top solutions out there.