How to Add ICO and OTC Purchases for Your Crypto Taxes
If you purchased coins via an ICO, presale, OTC service, or any other off-exchange transaction, then these are taxable events that you will need to manually import into our platform. We’ve made it easier to import trades with the manual entry screen, or you can also fill out and upload via our spreadsheet template if you have many transactions.
For these transactions, you will use the “trade” type. For buy amount and buy currency fields, enter the crypto that you purchased. In the sell amount and sell currency fields, enter in what you paid for the asset, whether it was ETH, BTC, or USD.
It’s important that, if you paid in crypto, you enter in the correct amount of crypto paid so as to reconcile your crypto balances history correctly. The fee fields can be left blank, unless you paid a fee, and for exchange, you can put in whatever helps you identify the transaction most (many users opt for “ICO” or OTC”).
Here's an example of what the transaction should look like for fictional token EXMPL bought with ETH:
How to account for ICOs where you received the tokens later
The IRS says that your holding period begins once you have possession of an asset. If you participated in an ICO and received the tokens later, you can accurately represent this series of events. First, put in a “spend” type transaction of the crypto paid, with just the crypto amount and currency in the sell fields, on the date that you sent the crypto in to the ICO.
Next, add in a “trade” type transaction with the amount of tokens you later received in the buy fields and the USD equivalent amount in the sell fields, with the date received in the date field.
This will establish when you received the tokens as well as the cost basis for those tokens. You can look at the USD amounts in the buy amount column of the initial “spend” transaction in your All Transactions page to find what the USD equivalent paid for the asset was.
Here's an example of said transaction, again using fictional token EXMPL bought with ETH:
In short, you’re telling our system that you A. disposed of the coin used to pay for the ICO at an earlier date and B. received at a later date the tokens, with a cost basis of that coin spent.
TokenTax does the work so you don’t have to.
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