Trying to calculate your 1inch taxes?
At this time, the most governments around the world haven’tIRS hasn’t released clear guidance on how DeFi is taxed. As a result, many investors are unsure how to report their 1inch taxes.
In this guide, we’ll break down everything you need to know about how 1inch transactions are taxed. We’ll also share a simple 3-step process that can help you report your 1inch taxes in minutes.
1inch is a decentralized exchange aggregator built on the Ethereum blockchain. The protocol was founded in 2019 by Sergej Kunz and Anton Bukov during the ETHNewYork hackathon.
1inch aims to help users save money by finding the best price for token swaps across different decentralized exchanges. Users can compare prices across the DeFi landscape and execute trades accordingly.
Cryptocurrency is subject to ordinary income and capital gains tax.
For more information, check out our ultimate guide to cryptocurrency taxes.
Because the IRS hasn’t put out specific guidance on DeFi specifically, tax professionals use previous tax rulings to determine how different transactions will be taxed. It’s reasonable to assume the following.
For more information, check out our complete guide to DeFi taxes.
Gas fees that you pay when you acquire and dispose of your cryptocurrencies can reduce your capital gains tax.
For more information, check out our guide to how gas fees are taxed.
At this time, decentralized protocols like 1inch don’t report to the IRS.
However, it’s important to remember that transactions on the Ethereum blockchain are publicly visible and permanent. In the past, the IRS has worked with contractors like Chainalysis to analyze the blockchain and crack down on tax fraud.
1inch does not provide tax forms to users. That means it’s your responsibility to keep track of your cryptocurrency taxes.
However, this can be especially difficult if you’ve transferred your cryptocurrency across different wallets and exchanges. In cases like these, it can be difficult to determine your cost basis and calculate your capital gains.
If you’re having trouble filing your taxes, crypto tax software like CoinLedger can help. You can aggregate your transactions across all your wallets and exchanges and file your crypto taxes in minutes.
With CoinLedger, you can import your 1inch transactions in 3 simple steps.
And that’s it! Once you’ve uploaded your other cryptocurrency transactions, you can generate a comprehensive crypto tax report with the click of a button.
Don’t spend hours of time and effort tracking your crypto transactions with spreadsheets. Get started with CoinLedger — the platform trusted by more than 300,000 investors across the globe.