On some trading places it is possible to lend your coins to other users. The coins that are credited as “interest” are first recorded in the Cryptotax app as deposits and must be classified by you as lending income. The certified Cryptotax software shows these coins in the report as other income.
The tax treatment is similar to that of income from Proof of Stake.
Note: If there are a lot of small payments, it can quickly become time-consuming to classify all payments individually. Using the manual data import, you can pre-classify the data in Excel and thus save time.
Note: There are some – unfortunately mostly dubious – business models that also offer “lending”. Often these are Ponzi Schemes, i.e. the coins are not really “lent” but old investors receive the money of the newer ones, etc. In these cases you don’t get any interest and at the end you get your initial stake back. In this case, you can also classify deposits as “lending” and temporarily enter your original investment – i.e. deduct it as income-related expenses.
Note: This classification only covers lending revenues that have been gained within the framework of “private lending”. Some Tax authorities distinguish between commercial and private lending. Private lending means first attempts without large investments, but the boundary to commercialism is quickly crossed. Since often no clear guidelines are published, we strongly advise you to get tax advisory. An individual consultation by a specialized tax consultant or lawyer is available on request by e-mail to [email protected] or via the Premium Service in the Cryptotax web application.