Zerion Tax Reporting
TokenTax imports Zerion data for easy cryptocurrency trade tracking and tax filing.
Background on Zerion’s DeFi support
Zerion is a decentralized finance (DeFi) interface founded in 2015. Its mission is to provide a simplified interface for accessing “decentralized finance to invest, earn interest and borrow crypto assets” in order to provide equal access to financial services globally. The platform connects with your wallets for an easy-to-access interface.
The trading platform allows you to track your portfolio across multiple DeFi platforms in real-time in one central place. Through the platform, Zerion facilitates lending crypto assets, allowing you to earn interest, trade crypto, and borrow stablecoins using crypto assets as collateral.
Through its app, Zerion also supports portfolio tracking on a large group of centralized exchanges. As an integrated platform, it also has a news feed built in to support traders. Both services are accompanied by a support desk.
DeFi taxes depend on which financial services you are utilizing
Since decentralized finance (DeFi) is such a diverse space, it makes sense that the tax treatment of different financial products is in fact different. Most tax treatment can be simplified by considering that any crypto to crypto trades or crypto sales to fiat currency are taxed.
For example if you are HODLing, you are only taxed on any capital gains or losses at the time you trade or sell your crypto. Learn more about the IRS treatment of cryptocurrencies on our crypto tax guide.
Trading crypto for crypto on an exchange is taxed as capital gains or losses at the time of disposition (e.g., exchange for another crypto or sale to fiat). Earnings or losses on options trades are similarly taxed as capital gains or losses at the time of sale.
ETFs and automated trading tokens, like TokenSets are similarly taxed as capital gains or losses on the actual purchase and sale of the token, but not on the underlying trades (such as the automated rebalancing of portfolio tokens).
Lending is however treated differently depending on whether you are the lender or lessee. Any interest earnings from your lending can be taxed as income or capital gains, depending on the platform. Borrowing in many cases does not incur taxes, unless the collateral is sold or exchanged (like in a liquidation event).
Staking rewards are also similarly taxed as ordinary income at time of receipt. As is the case for fiat lottery winnings, crypto lottery rewards are taxed as income as well.
For more information about DeFi taxes in the United States, we have published a few introductions to get you started:
DeFi Tax Guide to answer all your questions
Tax journal publication for more trading-geared information: McClure, Zac, et al., “Tax Guidance for Special Cryptocurrency Topics: Trading Bots, Algorithmic Trading, Margin Trading, Synthetic Trades, and Decentralized Finance,” The Bureau of National Affairs, Inc., 2020.
Our DeFi tax overview with Zerion for a succinct overview and convenient table reference
Reach out to us on our chat function (lower right corner) for more information on your specific tax situation.