How to file your BitDAO (BIT) taxes with Koinly
BitDAO is a large Decentralized Autonomous Organization (DAO) with the simple goal of building a decentralized tokenized economy available to all. BitDAO does this by allocating funds to various DeFi partners and projects. BIT token holders manage the project and can vote on budgets, proposals, and more, as well as sell and swap their BIT tokens as they would any other. Whatever your BIT investments, Koinly can help calculate your taxes for BIT tokens and thousands of other ERC-20 tokens. Here's how.
Sign up to Koinly and choose your country and currency
Connect Ethereum with Koinly to import all your trades safely and securely - including Ethereum-based governance tokens like BIT
Koinly identifies the cost basis of your tokens and coins, as well as your taxable transactions
Koinly calculates any capital gains, losses, and income from your taxable transactions
Koinly generates your crypto tax report - ready to help you file with your tax office, or hand it over to your accountant.
How are BIT tokens taxed?
Crypto tax depends on where you live and your tax office's guidance - so check out our crypto tax guides. This said, generally speaking, you'll pay either Capital Gains Tax or Income Tax on your BIT transactions:
Capital Gains Tax:Â If you sell or swap BIT tokens - this is usually seen as a disposal of an asset and any gain therefore subject to Capital Gains Tax.
Income Tax: When you earn new BIT tokens - for example, through ByBit Earn - this may be viewed as additional income and subject to Income Tax based on the fair market value of your BIT tokens in your fiat currency at the time you received them.
Can the IRS track BIT?
So, can the IRS track crypto? Let's break it down.
BIT is a governance token on the Ethereum blockchain. Like most other blockchains, Ethereum is a public ledger. That means anyone, the IRS included, can search for a given address to view the transactions made. In other words, if the IRS can link your identity to a given wallet or transaction, they may know about your investments.
As well as this, if you've traded or staked BIT using a centralized exchange, many of these exchanges issue 1099 forms to users with specific earnings - and whenever you receive a 1099 form, so does the IRS. This said, BIT isn't yet available on many centralized exchanges that operate in the US.
To avoid an unwelcome audit or crypto tax penalties, you should report your gains and income from crypto investments - including BIT - accurately.
How to get BIT tax documents
Most tax offices want you to report your gains, losses, and income from crypto investments in your annual tax return.
To do this, you need to first identify each taxable transaction and the kind of tax that applies, then calculate a capital gain or loss for each disposal of BIT, as well as identify the fair market value in your fiat currency for any BIT tokens viewed as additional income.
You have to do this not just for BIT, but for every crypto asset you've invested in, which is time-consuming for many investors using multiple exchanges, wallets, and blockchains. This is why most investors use a crypto tax calculator like Koinly to save themselves hours. Koinly can calculate your gains, losses, and income for more than 450,000 ERC-20 tokens -as well as governance tokens like BIT. You just need to connect Ethereum to Koinly, here's how.
How to import BIT transactions to Koinly automatically
To import your BIT transactions into Koinly, you’ll need to connect each Ethereum wallet you use to Koinly.
This is really easy to do, you just need your public address - but remember, you’ll need to do this for each Ethereum wallet you use to interact with BIT in order for Koinly to correctly identify your cost basis, transfers, sales, swaps, and more. If you're interacting with BIT tokens on exchanges like ByBit, make sure you connect these with Koinly too - you can do this easily using API or by uploading a CSV file of your transaction history.
You can find steps on how to connect a variety of popular wallets to Koinly on our integration pages, but here’s an example of how it generally works.
In your wallet
Open or log in to your wallet
Select Ethereum
Copy your public address
On Koinly
Sign up or log in to your Koinly account and go to the wallets page
Search for and select Ethereum
Give your wallet a name
Paste your public address
Important
Remember, you’ll need to do this for every wallet you use to interact with BIT tokens in order to calculate your crypto taxes correctly. If you're interacting with BIT tokens on centralized exchanges, make sure you connect these with Koinly too - you can do this easily using API or by uploading a CSV file of your transaction history.
It’s really helpful to name your wallets when you’re adding them to Koinly - you'll be able to find transactions more easily later on!
You may also be able to upload your transaction history to Koinly as a CSV file instead of connecting using your public address if you prefer, but this depends on the wallet you’re using. You can search for your wallet on our integration pages to find out more about how to get a CSV file from your wallet.
Your frequently asked questions
What is BitDAO?
BitDAO is a huge global DAO (Decentralized Autonomous Organization) that hopes to build a decentralized, tokenized economy accessible to all. To do this, BitDAO provides resources, liquidity, and funding to a variety of decentralized projects. All budgets, project proposals, and more are voted on by BIT token holders. BitDAO currently has more than $2.5 billion in the treasury, ready to help fund and build more DeFi projects.
What are BIT tokens?
BIT tokens are the governance token for BitDAO. Holders vote on everything related to the project, like grant allocation, budgets, new project proposals, and more. As well as this, investors can buy, sell, trade, and stake BIT tokens.
How can I get BIT tokens?
What is the price of BIT?
Like all cryptocurrencies, BIT price varies depending on market conditions. BIT had a previous all-time high of $3.64 and a previous all-time low of $0.2699.
How many BIT tokens are there?
BIT has a circulating supply of 2 billion and a maximum supply of 10 billion. BitDAO keeps a considerable portion of BIT tokens held in the treasury.
What is the purpose of BIT tokens?
BIT tokens are governance tokens. That means holders can use them to vote on the projects BitDAO funds and supports and how they support these projects.
Is BIT a good investment?
BitDAO is a large, viable project with a clear mission that is truly decentralized - meaning BIT holders get the final say in how the DAO manages funds and the partners it supports. This makes BIT tokens an appealing investment for many. This said, like all cryptocurrencies, BIT tokens may be volatile in price so you should always do your own research to understand the risks before investing.
How can I store my BIT tokens?
BIT tokens can be stored in any hot or cold wallet that supports ERC-20 tokens, but it's important to store your tokens securely by following best crypto security practices.
What blockchain are BIT tokens on?
BIT is a governance token on the Ethereum blockchain.
Do I have to report my BIT tokens to the IRS?
Yes, you need to report any gains, losses, or income from crypto including BIT to the IRS as part of your annual tax return. If you don't, you may face steep penalties and fines.
