According to Koinly’s Tony Dhanjal, the integration enables LUNA users to correctly track and document their transactions in order to comply with their tax obligations.
Koinly, a cryptocurrency tax computation platform, has added Terra (LUNA) wallet functionality to make tax calculation easier for Terra (LUNA) holders as the deadline for filing Canadian tax returns approaches.
Tony Dhanjal, Koinly’s head of tax, stated that many Koinly users had sought LUNA support, and the connection will provide LUNA users with a “means to precisely track and record their transactions to meet their tax requirements.”
Calculating crypto tax is straightforward if a user’s crypto transactions are straightforward. According to Dhanjal, “the average crypto investor is connected to between three and five exchanges, wallets, or blockchains.” As a result, calculating taxes using these sources is extremely complicated, and the likelihood of making an error is significant. This is why Dhanjal advocates the use of a straightforward cryptocurrency tax calculator.
Apart from that, Dhanjal underlines the critical nature of crypto taxation. While the process differs by country, the majority of countries demand the reporting of crypto tax. The tax expert recommends individuals to pay not only their crypto taxes, but also any other taxes owed as an individual or business. Dhanjal clarified:
“Ignorance is not an acceptable explanation, and there may be a delicate line between this and unlawful tax avoidance […] Tax evasion fines can be significant, not to mention the reputational and other damage that this might cause you or your firm.”
Thomas Shea, EY’s crypto tax executive, warned people that purchasing cryptocurrency with cash or realising any unrealized gains is not a taxable event. Additionally, Shea stated that the same holds true for nonfungible tokens.
Meanwhile, cryptocurrency projects operating in India have announced their intention to relocate to more crypto-friendly jurisdictions in light of India’s crypto tax law, which puts a 30% tax on the ownership and transfer of digital assets.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.