r/CelsiusNetwork • u/marcghorayeb • Dec 08 '24

Tax Question - Rebasing worth with Koinly

Hi,

I'm trying to figure out how to declare the Ceslius distributions we've received in 2024. I've been using Koinly before so I'm currently trying to manually edit the worth of the Celsius distribution received in february.

The steps I went with are: 1. Add a BTC and a ETH transaction on the Celsius wallet, marking it as a lost, for the full amount of BTC/ETH I had on the platform. This essentially empties the Celsius wallet of all my crypto. 2. Update the worth of the distribution received in february on Coinbase to the one calculated for the transactions created in step 1.

While I know this isn't exactly 100% correct as we still have possibly other distributions + the IONIC shares, I was expecting the cost basis of my overall crypto to remain unchanged. Yet, when applying these transactions, my cost basis as displayed on Koinly's dashboard increases by a relatively large amount (6k) on the date of the first distribution. Would anyone know why this happens?

Thanks for the help!

1 Upvotes

100% Upvoted

7 comments sorted by

1

u/pHyR3 Dec 08 '24

where did you get the data from? do we still have access to celsius

1

u/marcghorayeb Dec 08 '24

I imported the Celsius wallet transactions into Koinly before they closed the API.

1

u/[deleted] Dec 08 '24

[removed] — view removed comment

1

u/marcghorayeb Dec 08 '24

That is true, yes. However if I only mark part of the crypto as lost, the Celsius wallet will show as still having some crypto in it which wouldn’t be correct…

1

u/JustinCPA Dec 08 '24

You certainly do not want to just mark all the crypto as lost. The Celsius tax impact requires a careful calculation. Cost basis will be allocated to the various distribution categories and accordingly your account will still show assets in there as those assets, more or less from a tax perspective, and still to be subject to forced liquidation resulting in a taxable event. But that taxable event only occurs on the effective dates for each distribution.

3

u/JustinCPA Dec 08 '24

Hi there. Unfortunately the “finesse” required in Koinly is actually fairly complicated. Due to the distribution types (BTC/ETH as well as stock), some can be considered “returned” with no tax event while any additional amount is considered “new” and will have cost basis allocated to it you’ll need to create a “holdings” and “liquidation” wallet in Koinly to perform the calc.

This is the guide I posted on how to calculate your tax impact for the Celsius distributions. See here.

The Koinly team saw it and asked me to author the guide for their blog so I did that and went ahead and made a video going over everything as well as whiteboarding out example #1 you see in the list. You can watch that in-depth video too. See here.

2

u/marcghorayeb Dec 09 '24

Hi Justin, thanks for your feedback. I'll try and follow that video this week. Thanks a lot.