When you take advantage of rewards by locking your crypto in staking protocolsâwhether on a centralized platform or a decentralized on-chain solutionâitâs important to properly manage the related transactions to accurately calculate your gains and profits.
Read this article to learn how to manage your staking activity correctly.
How to manage staking transactions
Staking of Currency
Staking is represented by a withdrawal/outgoing transaction (whether to an on-chain contract or an exchange) and must be categorized under the Staking transaction type. Using this category excludes the transaction from capital gains calculations, making it fiscally irrelevant.
Receiving staking rewards
Rewards earned from staking are usually received on a regular basis (daily or weekly, depending on the protocol/platform used) and are recorded as deposit/incoming transactions categorized under Staking.
Return of Funds at the End of the Staking Period
At the end of the staking period, the initially locked amount will be returned, resulting in a deposit/inflow transaction that should be categorized as Trading.
Complete overview of staking management
Staking â staked funds are recorded as outgoing transactions under the Staking category.
Staking Rewards â rewards received from staking are recorded as incoming transactions under the Staking category.
Return of Funds â funds returned from staking are recorded as incoming transactions under the Trading category.
â ïž Acquisiton cost management
Set the price manually to preserve the original acquisition cost
By default, Finbooks applies the automatic market price of the day to any incoming transaction, including the one representing your staked asset returning to your portfolio.
If you want this returning transaction to keep the original acquisition cost of the asset instead of the market price on the return date, you must manually set the price on that transaction. Otherwise, Finbooks will use the automatic market price of that day, which can distort your capital gain calculation on a later disposal.
Read this article to learn how to set the price manually.