Looking to report taxes on your Cardano transactions?
If you’re earning staking rewards and/or buying and selling Cardano (ADA), it can be difficult to keep track of your income and capital gains.
In this guide, we’ll break down everything you need to know about how Cardano transactions are taxed and share what you’ll need to accurately report your taxes. We’ll also discuss how you can report all your Cardano transactions on your tax return in minutes!
Cardano is a blockchain founded in 2017 by Charles Hoskinson, one of the co-founders of Ethereum. It is the first blockchain to use a peer-reviewed research approach to development.
The blockchain leverages Proof of Stake (PoS) technology to power the network. The ADA coin is used to power the network and help participants reach consensus.
In the United States, Cardano and other cryptocurrencies are subject to capital gains and ordinary income tax.
For more information, check out our complete guide to cryptocurrency taxes.
It’s important to remember that transactions on Cardano and other blockchains are publicly visible. In the past, the IRS has worked with contractors like Chainalysis to track transactions posted on the blockchain.
Reporting your Cardano taxes manually can be difficult. To accurately report your taxes, you’ll need a complete record of your cryptocurrency transactions across all your wallets and exchanges.
Luckily, there’s an easier way. With crypto tax software like CoinLedger, you can file your cryptocurrency taxes in three easy steps.
1. Copy and paste your Cardano wallet address into CoinLedger.
2. Let the platform pull your transactions directly from the blockchain.
3. Download your tax report.
In addition to Cardano, CoinLedger supports hundreds of the world’s most popular exchanges and blockchains! You can import all of your crypto transactions in just minutes.
Staking rewards are taxed as ordinary income based on the value of your coins at the time of receipt. If you dispose of your staking rewards, you may incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it.
For more information, check out our guide to how staking rewards are taxed.
NFTs traded on Cardano are taxed similarly to other crypto-assets.
When you buy an NFT with cryptocurrency, you’ll incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it.
When you sell an NFT, you’ll incur a capital gain or loss depending on how the price of your NFT has changed since you originally received it.
For more information, check out our ultimate guide to NFT taxes.
While the IRS hasn’t released guidance on how DeFi transactions are taxed, we can reasonably assume the following based on previous guidance.
For more information, check out our complete guide to DeFi taxes.
Want to track your Cardano transactions for tax purposes? You’ll need to keep records of the following:
Tracking this information can be difficult, especially if you’re using multiple wallets and exchanges. Many investors use crypto tax software to record their transactions and save hours of time and effort during tax season.
Looking for an easy way to file your Cardano taxes? Get started with CoinLedger — the platform trusted by 400,000+ investors worldwide.