How to file your BitDAO (BIT) taxes with Koinly

How to do 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 400,000+ ERC-20 tokens. Here's how.

1. Sign up to Koinly and choose your country and currency
2. Connect Ethereum with Koinly to import all your trades safely and securely - including Ethereum-based governance tokens like BIT
3. Koinly identifies the cost basis of your tokens and coins, as well as your taxable transactions
4. Koinly calculates any capital gains, losses, and income from your taxable transactions
5. 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:  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

1. Open or log in to your wallet
2. Select Ethereum
3. Copy your public address

On Koinly

1. Sign up or log in to your Koinly account and go to the wallets page
2. Search for and select Ethereum
3. Give your wallet a name
4. Paste your public address

How do I troubleshoot my BitDAO integration to Koinly?

Problems connecting to Koinly? No worries - there's help at hand:

• Head over to our help center
• Hit up our discussion boards - we might have already answered your question
• Ask us on social media - we're on Twitter or Reddit
• Contact us by email or live chat
• Got a feature request? Give us feedback on Canny