Your SushiSwap transactions might just come with a surprise tax bill. Find out everything you need to know about how different transactions on SushiSwap are taxed in our SushiSwap Tax Guide 🍣
Yes. You'll need to pay tax on any taxable transaction you make on SushiSwap.
In general, crypto is subject to either Income Tax or Capital Gains Tax - depending on the specific transaction you're making. This means each transaction is viewed slightly differently from a tax perspective, so let's break down each.
Yes. In almost all countries, trading one crypto for another is subject to Capital Gains Tax.
You'll need to pay Capital Gains Tax on any profit you make from the trade. So for example, say you've traded WBTC for ETH - you'd need to pay tax on any profit you've made from your WBTC.
To figure this out, just subtract your cost basis (how much it cost you to acquire the asset plus fees) from the fair market value of the crypto on the day you bought it. If the price of the asset has increased, you have a capital gain and you'll pay Capital Gains Tax on that amount.
Like we said, there's no clear guidance from the IRS or just yet on adding and removing liquidity from a tax perspective which is causing a lot of confusion among investors as to whether to report these transactions.
However, when you add liquidity on SushiSwap, you'll get an SLP token in return. Similarly, when you remove liquidity on SushiSwap, you'll exchange your SLP token in return for your original capital. This could be seen as trading one token for another - even if you're only realizing a gain when you trade your SLP token(s) back - therefore it could be subject to Capital Gains Tax.
Like we said above, there's no clear guidance from the IRS (or other tax offices) on LP tokens from a tax perspective. What it all comes down to is how the specific DeFi protocol you're using works.
You don't earn new liquidity pool tokens on SushiSwap - instead the value of your liquidity pool token increases when trades are made in the pool you've added to. In this sense, you're not earning new tokens so it's unlikely this is going to be seen as income and subject to Income Tax.
It's only when you withdraw your original capital by trading your liquidity pool token back that you'll have a realized gain. This suggests the taxable transaction would be the token trade when you're removing liquidity - which could be subject to Capital Gains Tax.
The IRS has not yet issued clear guidance on staking rewards tax. However, many other crypto rewards - like mining and referral bonuses - are subject to Income Tax at the point you receive them as you're earning new coins/tokens.
When you stake SLP tokens (or KMP tokens), you earn SUSHI tokens. You can harvest these rewards at any point. This would suggest that you'd need to pay Income Tax on your SUSHI based on the fair market value at the point you receive it.
Yes - it's likely you'll need to pay tax on staked SUSHI tokens. However, due to the way the SUSHI staking protocol works, it's likely this would be Capital Gains Tax, not Income Tax.
When you stake your SUSHI tokens, you'll receive XSUSHI tokens in return. Like with SLP and KMP tokens, XSUSHI tokens grow in value, instead of you earning new tokens. So you'll only realize a gain when you unstake your SUSHI tokens by exchanging your XSUSHI tokens back. This would be more akin to a crypto to crypto trade and therefore subject to Capital Gains Tax.
There is no guidance from the IRS on any DeFi lending protocols, so we can only interpret the current tax rules and infer how lending on SushiSwap might be treated from a tax perspective.
When you lend on SushiSwap, you'll receive KMP token(s) in return. These KMP tokens then grow in value based on the APR collected through lending. Similarly, when you want your original capital and returns, you'll trade your KMP token(s) back.
So even though you're not disposing of your asset, these transactions could be interpreted as crypto to crypto trades and therefore subject to Capital Gains Tax.
Like with SLP tokens, you can stake KMP tokens to earn SUSHI tokens. Because of the way you earn SUSHI tokens - as in you earn new tokens you can harvest at any point - this would suggest these earnings could be subject to Income Tax.
It's not clear how borrowing on DeFi protocols is seen from a tax perspective.
You need to provide collateral on SushiSwap to borrow - but many would argue this is not a disposal and therefore cannot be subject to Capital Gains Tax. Similarly, the tokens you borrow could be seen as more similar to an acquisition which is tax free. However, transactions you make with your borrowed tokens may be subject to tax.
It is likely this transaction could be seen as a crypto to crypto trade, even if you can get your asset back at any point. This means it could be subject to Capital Gains Tax.
Again - there's no tax guidance on one-click yield farming strategies (shockingly), so we have to look at how you earn and how rewards are paid out for an idea of how taxes may work.
When you use the Inari tool, you're staking SUSHI for xSUSHI - which is lent out through different protocols. You realize your gain when you trade your XSUSHI back for SUSHI. This is more akin to a crypto to crypto trade, which means it could be subject to Capital Gains Tax.
You can make a few different transactions on SushiSwap’s NFT marketplace Shoyu - so let’s break it down.
It depends on where you live - each tax office has different reporting requirements for crypto.
In the US, you need to report each taxable crypto transaction on Form 8949, including:
You’ll also need to report your net capital gain and loss on Schedule D and any crypto income on Schedule 1 and potentially Schedule C.
If you’re an active trader on SushiSwap and utilizing the farming and staking opportunities, the list of transactions you need to report can quickly ramp up into the thousands per financial year. You’ll need good records of all your transactions on SushiSwap with all the information - you can do this manually or with a crypto tax app. Let’s look at both.
You need your SushiSwap transaction history to get started with your SushiSwap taxes. There’s two ways you can do this.
Learn how to connect SushiSwap to Koinly in minutes.
No. SushiSwap doesn't provide a tax report - even if it did it would only cover your SushiSwap taxes and most crypto investors are using multiple platforms, so the tax report would be redundant.
Instead, you can get your SushiSwap tax report by importing your SushiSwap transaction history into a crypto tax app using API.
No. SushiSwap doesn’t supply a financial statement.
There’s two ways you can do this depending on whether you’re using crypto tax software or not so we’ll look at both.
If you’re doing your taxes yourself, you need a complete transaction history from SushiSwap for the financial year. As we said, there's no easy way to get this so your best bet is creating a custom CSV file yourself. You’ll then need to identify each taxable transaction, the subsequent income or capital gain/loss and report this to the IRS using Form 8949 for capital gains and losses, Schedule D for net capital gains and losses and Schedule 1 for crypto income (and potentially Schedule C too for income).
Alternatively, use a crypto tax app and skip all the spreadsheets and math. All you need to do is sync your SushiSwap transactions using the API. Your crypto tax app will then identify your taxable transactions and calculate any capital gains, losses and income for you. You can then download a tax report specific to your location to hand over to your tax office - for example, you can download a pre-filled Form 8949 and Schedule D.
SushiSwap doesn't offer a CSV file export option. The best way to get a complete CSV file of your SushiSwap transaction history is to create one yourself. You can use third party services like BSCscan and Etherscan to download a CSV file of your transaction history on a given blockchain.
The easier option is to use an API to get your SushiSwap transaction history automatically imported into a crypto tax app.
All you need to do is sync the wallets you use to interact with SushiSwap. So for example, if you use MetaMask to interact with SushiSwap, you just need to sync your MetaMask wallet with your crypto tax app using the API. We've got instructions on how to get your API keys for the most popular SushiSwap wallets on our integration pages. Once you’ve got your API keys, enter them into your chosen crypto tax app and it’ll calculate your SushiSwap taxes for you and generate your tax report.
You might also find our help guide on integrating DeFi platforms with Koinly helpful.
Anonymity is a key tenet of DeFi - so like most other DeFi protocols, SushiSwap doesn't have a KYC verification process.
Most of the wallets you'll use to interact with SushiSwap also don't have a KYC process - so you might think you're in the clear. However, you'll need to link a card to many of these wallets. If you've got transactions from your bank account linking you to crypto activities, the IRS is going to want to know about it.
Similarly, if you're moving assets between SushiSwap and centralized exchanges - these centralized exchanges have seen a lot of pressure from the IRS to share KYC information to ensure tax compliance.
The best way to stay tax compliant is to report your crypto taxes accurately.
If you’ve been wondering is Koinly a SushiSwap tax calculator tool, the answer is, yes! Not only can Koinly import SushiSwap transaction history, but Koinly can also calculate your SushiSwap taxes in a format that makes sense for your country’s tax office.
As a SushiSwap tax calculator, Koinly is able to do a bunch of impressive tasks that save you time and can even save you from paying too much taxes.
The information on this website is for general information only. It should not be taken as constituting professional advice from Koinly. Koinly is not a financial adviser or registered tax agent. You should consider seeking independent legal, financial, taxation, or other advice to check how the website information relates to your unique circumstances. Koinly is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.