Capital Gains Tax Guide for Celo
A short blog providing tips for calculating capital gains
Last updated
Was this helpful?
A short blog providing tips for calculating capital gains
Last updated
Was this helpful?
How are Celo tokens typically taxed?
Broadly, there are two taxes relevant for cryptocurrency transactions: i) income tax, and ii) capital gains.
We'll focus here on capital gains tax. For income tax, you can read .
What are some typical examples of capital gains on Celo?
Selling any token, e.g. Buying 10 CELO when the price of 1 CELO was $3, and then selling 10 CELO at a price of $5 each, for a total gain of 10 x $5 less 10 x $3 = $20.
Contributing CELO and mcUSD to a liquidity pool on Ubeswap. This is like selling CELO & mcUSD and realising a gain/loss on each.
Exiting a liquidity pool on Mobius, e.g. returning Ube LP tokens and getting back aaUSDC and cUSD. In this case, a gain/loss is typically realised on the sale of your Ube LP tokens when you return them.
On what value is capital gains tax paid?
Capital gains tax is typically paid on the value of the gain realised. In many jurisdictions, one can offset any losses from the same tax year (and sometimes a net loss from previous years).
The value of the gain realised is calculated in the base currency, e.g. for filing taxes in Ireland gains/losses are calculated in Euro.
How do I calculate my gains/losses?
Head over to .
Log in with your wallet.
Select your local currency (USD, EUR, BRL, GBP) to view a summary of your gains/losses by year (free for wallets with < 50 transactions). [Optionally, you can select the "By Token" view to see gains/losses broken down by token.]
Optionally, download a csv file for detailed info.
What about NFTs on Celo Punks or Celo Apes or Celestrials?
If you buy and then re-sell an NFT, you typically pay capital gains tax on any gains. Stay tuned (or sign up for our mailing list ) for info on Celo.Tax NFT software.
What tax rates apply for capital gains?
Some jurisdictions have no taxes on capital gains (e.g. Singapore or Portugal for crypto).
Some jurisdictions apply a different tax rate depending on how long you hold the asset for (e.g. the US). [Celo.Tax doesn't split gains by holding period, but we plan to add that feature over the next months.]
How is a gain calculated if I only sell part of my holdings?
There are a number of methods for doing this that all result in different gains/losses. The most common is First-in-first-out (or FIFO), whereby one considers selling tokens in the same order that they were purchased.
There are other methods such as Last-in-first-out (i.e. you sell the ones you bought most recently) OR Highest-in-first-out (which results in the smallest capital gain) that are also supported by Celo.Tax.
Some jurisdictions allow you to choose your method of calculation. Other jurisdictions specify which method to use. Calculations are complicated for most methods because your total gain often depends on the entire history of your purchases of that token. This makes it impractical to calculate gains without a full transaction history and software to do the calculation.
P.S. If you want to get early access to product updates, check out our .