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Coinly is a leading cryptocurrency tax calculator and portfolio tracker for traders, investors and accountants. There are several features that make it stand out from the competition, and this article will present five key reasons why Coinly is really the best crypto tax software in the world today. These include a wide range of exchange and wallet integrations, DeFi support, Cardano support, support for liquidity transactions, and compatibility with multiple countries.
wide range of integrations
Whether a taxpayer looking to get an accurate crypto tax report, a business looking to track their inventory or an accountant trying to work through a maze of transactions, Koinly is the go-to software. . It is a crypto tax calculator that makes taxes enjoyable. It comes with a plethora of features and integrations that will make it extremely easy and convenient to meet all crypto tax needs.
With Koinly, one can easily track crypto assets and taxes across all wallets and blockchains and exchanges over time. It has never been more accessible to view total holdings and portfolio growth over time in one place. View real ROI and Fiat currency invested, earnings overview, and preview of profit/loss and capital gains for free. Also, prepare tax documents whenever required. Koinly’s tax calculator can help with the filing of tax returns and reports and does so in compliance with the tax regulations of an individual’s country. If one is based in the USA, Koinly generates completed IRS tax forms. The calculator also has international support for people living in Canada, UK, Germany and many other countries. Koinly allows taxpayers to easily export transactions to other tax software such as TurboTax and TaxAct.
Say goodbye to wrong tax reports or absurd profits; With Koinly, a person can view their transactions, thanks to a number of tools to help find any issues they may have. There is a double-entry ledger system – each change in an individual’s asset balance is backed by a single entry, making it easier to debug. An auto-import verification tool automatically checks the wallet via the API to ensure that all imported data is correct. In addition, Koinly also highlights errors due to incorrectly imported or missing transactions, resulting in balances going below zero and discarding duplicate transactions whether the import is via API or CSV files. There is no need to track what is imported and what is new.
Most importantly, all transactions are in one place, across 350+ exchanges (such as Binance, Coinbase and AscendX), 50 wallets (such as Ledger, Trezor and MetaMask) and 11 services (such as Nexo, BlockFi and Paxful). Thanks for integrating with Koinely. No going back and forth between different platforms. Easily sync data with Coinly and get a complete picture of all trading activity.
DeFi Support
When a user creates a new ETH, BSC or Polygon wallet, Koinly can automatically import all trades and liquidity transactions from DeFi platforms like Uniswap, Sushiswap, Cream, Value, Balancer, PancakeSwap and many more. With tax authorities cracking down on crypto investors around the world, it is important to understand what DeFi is and the tax implications of DeFi investing. DeFi is not just a concept. It is an all-encompassing term for various financial applications created using blockchain technology or cryptocurrency. DeFi protocols are autonomous programs (smart contracts) created to perform specific tasks.
The DeFi protocol helps to address the problems that exist in the traditional financial sector. For example, if someone wants a loan from a traditional bank, they usually need to provide proof of identity, proof of income, proof of where they live and fill out a number of forms. Nevertheless, with DeFi, one simply has to submit an asset to a given protocol which will do so automatically. The protocol sets out the terms, conditions and rules. If a person cannot return the payment, the Protocol will terminate the contract; This is just one example of a DeFi protocol out of hundreds that exist. A user can do anything with the DeFi protocol through a centralized crypto exchange, including:
- send money to anyone, anywhere
- Stream money around the world
- start a savings account
- Exchange fiat currency, coins and tokens
- Manage and develop a financial portfolio
- borrow money with or without collateral
- Derivatives, Margin and Leveraged Trading
- Lend own money to earn interest or rewards
- Access and invest in stable currencies
- Crowdfund new DeFi platforms, services and apps
- get insurance
- bet on the outcome of current events
Although the tax offices have not yet issued precise guidelines on DeFi taxes, they have given clear guidance on crypto taxation. Since cryptocurrencies are considered assets for taxation purposes, they are always taxed in one of two ways – income tax and capital gains tax; Depending on whether one’s crypto investments are viewed as regular income or regular income settlement of an asset. Understanding what kind of tax applies to one’s investments can be challenging for many, so crypto tax calculator software such as Coinly makes it more accessible.
Koinly crypto tax software calculates all crypto taxes for individuals, including DeFi taxes. One needs to sync wallets and exchanges to use them with Coinly via API or import a csv file of their crypto transactions. Koinly will identify various crypto transactions and apply the associated taxes. The data should be automatically labeled, but if it is not, the user can tag DeFi transactions as loan interest, interest payments received from the pool, sent to the pool, or rewards.
cardano support
In addition to over 17000+ cryptocurrencies supported by Coinly and 50 different blockchains, it can also help with your Cardano (ADA) taxes by betting on wallets such as Yoroi and Daedalus. Cardano is a proof-of-stake based blockchain platform that was founded in 2015 by Charles Hoskinson, the co-founder of Ethereum.
Coinly supports liquidity trading
The term liquidity is generally used in financial markets to describe the ease by which an asset can be converted into cash without difficulty. In the context of cryptocurrencies, liquidity is Ability of a coin to be easily converted into cash or other crypto coins, Liquidity transactions are done every day as liquidity is essential for any tradable asset. There is considerable debate on whether liquidity transactions are taxable. Koinly currently supports liquidity transactions on the Ethereum, Binance Smart Chain and Polygon blockchains. Liquidity transactions are imported and automatically tagged as liquidity. It also currently supports several liquidity protocols such as:
Balancer Pool, Uniswap, Sushiswap, Sakeswap, Snowswap, Mooniswap, Curve.fi, Bancor, Yearn Finance, PancakeSwap, Value, Cream, STM Network, APY Finance, Pancake, 1inch; With the list steadily increasing.
By default, Coinly considers liquidity transactions to be taxable because the usage is exchanging tokens for LP tokens that can be traded or staked to earn more coins. However, if one feels that such liquidity transactions should not be taxed, Coinly has a functionality to turn it off on the setting page, ‘Get profit on liquidity transactions’.
Koinly supports over 100 countries
Koinly is a good choice for international tax reports compared to many other tax software, as it supports over 100 countries. It is available in different countries like:
- America
- UK
- Canada
- Australia
- Brazil
- New Zealand
- Denmark
- Finland
- France
- Germany
- Japan
Koinly generates localized versions of tax reports when someone changes their country, so it does much more than just change a few currency figures. For example, if a person moves from the United States to Australia and selects it as their home country, Coinly will automatically have the appropriate additional tax report options for that country.
Visit Coinly today to learn more about crypto taxes in 2022.
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