Can someone help me understand how the tax process works?
If I transfered from binance and let’s say I transfered after being up 1,000 then transfered to yoroi to stake and now since with yoroi im now negative $100 total from initial investment.
Will I get a tax form from both nmbinsnce and yoroi?
Do I pay taxes on rewards?
I dont really get what you mean but there is nothing like a tax on the protocol.
For each transaction you have to pay a transaction fee and thats it. Exchanges often charge an addional fee for withdrawing funds.
Cheers
Fabian
I had more then 1 question
1.If I made profit while holding in binance prior to transferring to yoroi do I pay taxes on that profit?
I can’t answer that, it’s different in every country.
In Romania for example, u will need to pay taxes for profit only when u will convert ur coins in fiat or when u use the coins to buy goods
Cheers
I live in America. Not sure where you live
Your questions have nothing to do with cardano or yoroi. They are purely legal questions. Tax regulations depend on the legal jurisdication (e.g. country / state) you belong to. Not sure this is handled the same in all US States. In general you will have to pay taxes on every taxable event. This is the case when you sell any of your ADA (or exchange them to a different crypto asset) and have realized any gains with them.
Just transfering them between exchanges and/or wallets are non taxable events if the accounts are owned by you. In most cases also your earnings through staking are taxable events and you will need to pay taxes for them too. You can reduce your taxes are lot just by buying and holding your ADA more than one year. You will find lot’s of youtube videos regarding crypto taxes. There are several paid services out there that can help you with the book-keeping of your transactions. Taxes also depend on your personal situation so it is recommended to ask your tax advisor.
Please be aware that the tax authorities are or will be able in future to track all your transactions.
Thanks. I was referring to the rewards. Do you pay taxes on you’re rewards from staking or is that the same. Only when you sell?