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Revenue from masternodes, farming, staking and mining

Waltio labeling and tax declaration

Updated over a week ago

Hi there 👋

The gains obtained by masternodes, staking (immobilization of tokens to obtain more), farming and mining are not defined by the law. There is therefore a legal blur. Interpretations among tax lawyers differ. Here is the one put into practice by Waltio.

Is mining a professional activity?

The mined cryptocurrencies, if they do not constitute a significant part of the total income of your tax household, could be integrated within your digital assets capital. Thus, they can be declared as professional (Non-Commercial Profits - BNC regime) or simply added within your portfolio. In the second case, the collection of this income is not a taxable event and its resale will be subject to the regime of capital gains in digital assets assimilated to the Single Forfaitary Levy (PFU).

Income from masternodes, staking, taxable income?

The income generated through these transactions should not be a taxable event because the taxpayer does not benefit immediately.

Therefore, each transaction should be tracked and added to your overall digital asset portfolio at a total acquisition price of 0.

Concretely, how does it work in Waltio?

After running an analysis (step 3), the taxable income in Waltio will appear as Warnings and you will have to click on Correct.

Filter on transactions with warnings and your deposits, then assign the right label (masternodes & staking) to the transaction(s).

Here is the use case of the “staking” label (formerly internal operation):

1/ You send 10 DOTs on the DOT smart staking contract (an address that is not on Waltio), they are locked for 6 months and label the operation of withdrawing these 10 DOTs as “Add staking”.

✔️ So you have 10 DOTs in stock.

2/ After 6 months, you “find” your 10 DOTs and label the operation of depositing these 10 DOTs as “Unstaking”.

✔️ You still have 10 DOTs in stock.

Labeling allows for proper tax registration.

If you have any other questions, do not hesitate to contact us via the chat just at the bottom right of your screen! 💬

The Waltio team

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