Get rich quickly and easily with cryptocurrencies – a wonderful dream. With the switch from Ethereum (ETH) to the staking process, there will be a pitfall for investors in 2022: The tax office is tightening the reins.
New to Ethereum: crypto traders have to be vigilant
Those who invest their money in crypto currencies cannot avoid the tax office. Because digital coins are still comparatively new as a financial investment alongside stocks or real estate values, there is still a lot of uncertainty about taxation. But it doesn’t work without it – and A change is pending at Ethereum, which will be reflected in the tax return (Those: Token InfoPort).
This is of a technical nature, because the second most valuable crypto-coin after Bitcoin in terms of market capitalization renounces “mining”. Since the end of 2020 ongoing change to the so-called “proof of stake” method should be completed this year. Instead of pure computing power, a weighted random principle decides who gets the next Ether blockchain entry.
In order to participate, ETH holders must release coins for the staking pool. The amount of Ether-Coins provided influences the probability of winning and the right to be able to add a new entry to the Ethereum blockchain. the Winner also receives a reward in ETH, as do the validators who take part in the review of the new application. You make a profit with it.
It is this profit that makes the difference for the tax office. According to the authority, staking is taxable income. The return achieved is according to the crypto portal only tax-free after a holding period of ten years. With the previous “Proof of Work” concept, profits could be reaped tax-free after just one year.
Some of these shit coins are not to be trifled with:
Tax hammer for ETH owners: this is how you avoid the worst
Taxation is not without it. The capital gains tax of 25 percent does not apply, instead the personal tax rate still applies when calculating can be significantly higher. Anyone who owns ETH should therefore be particularly careful when filing their tax return in the future. With many crypto wallets, you can also exclude staking from the outset.
Crypto expert Matthias Steger advises Token InfoPort: “In time, sell all Ethereum coins that you have held for at least a year. Because as soon as the coins go into staking, the ten-year period will apply to them. ”If you sell older ethers in good time, you can save yourself the tax hammer. According to the current status, future investors need to dig deeper into their pockets.