This page explains how the main net swap is calculated.
DISCLAIMER
As in our terms of use, we have no responsibility on the following message. If you have any questions, please reach out your tax accountant.
What is Mainnet swap?
Maine swap is an event where a crypto project, which raised funds via ICO using ERC20 token on Ethereum, launches its own blockchain and offer an exchange from the token to the new currency on the chain.
For major cryptocurrencies, crypto exchanges automatically handle the swap for their clients. Examples are EOS and TRX this year.
The following would apply to those who hold the cryptocurrencies which saw mainnnet swaps.
Realized Profit and Loss calculation of Mainnet swap
After talking with our tax accountants, we received the following two comments:
- Swaps from the old token to the new currency is considered to be an exchange of cryptocurrency, thus it needs to be included in profit and loss calculation.
- Swaps done by crypto exchanges could be said done against the asset owner's will, however, the profit and loss should belong to the actual asset owner.
What Cryptact will do
With the comments above, Cryptact plans to have the following automatic processing of mainnet swap event. We'd aim this to be implented somewhere in Q1 2019, however, we won't guarantee the time to implement nor whether or not this to be implemented. If you'd like to handle this event by yourself, please refer to 'How to handle Mainnet swap manually'.
Planned Automatic Processing
Cryptact will automatically add the following two trades:
- Sell all of the old coins at market price, at the time when an mainnet swap event happened.
- Buy the same amount of coins at market price, immediately after the trade above.
Time and Price are based on our research.
Other considerations
As we find mainnet swaps, we'd apply the same logic - we'll update our clients what cryptocurrencies are applied.
Also, this processing reflects general profit and loss calculation, and please consult professionals for individual cases.
How to handle Mainnet swap manually
In case of EOS
- Check the number of EOS token you had at 2018/06/02 22:00 in UTC.
- Enter a sell trade of EOSJPY
- Quantity is what you checked at step #1.
- Trade time is 2018/06/02 22:00 in UTC
- Please research the price by yourself (FYI: Cryptact Price of EOSJPY is 1610JPY).
- Enter a buy trade of EOSJPY
- Quantity is the same as the sell trade
- Trade time is 2018/06/02 22:05 in UTC
- Please research the price by yourself (FYI: Cryptact Price of EOSJPY is 1610JPY).
* the gap of 5 minutes is required for us to put an automated process in future.
In case of TRX
- Check the number of TRX token you had at 2018/06/24 16:00 in UTC.
- Enter a sell trade of TRXJPY
- Quantity is what you checked at step #1.
- Trade time is 2018/06/24 16:00 in UTC
- Please research the price by yourself (FYI: Cryptact Price of TRXJPY is 4.375JPY).
- Enter a buy trade of TRXJPY
- Quantity is the same as the sell trade
- Trade time is 2018/06/24 16:05 in UTC
- Please research the price by yourself (FYI: Cryptact Price of TRXJPY is 4.375JPY).
* the gap of 5 minutes is required for us to put an automated process in future.