I'm unsure how to declare the units associated with fees when transferring between wallet and broker. Let me give you an example:
Day 1: I buy 2 Eth from the exchange for 2000 €/unt.
Day 2: I move the 2 Eth from the exchange to my wallet. (Only 1.999 arrives. A network fee of 0.001 eth is charged)
Day 3: I move 1.999 Eth back to the exchange. (Only 1.998 arrives. Network fee is 0.001 eth again)
Day 4: I sell 1 Eth for 1500 €/unt. Keeping 0.998 Eth. (Taxable event)
Day 5: I sell 0.998 Eth for 1400 €/unt. (Taxable event)
According to FIFO principle of declaration I should declare like:
Event 1: Sold 1Eth on day 4. Purchased on day 1. (loss of 500 €)
Event 2: Sold 0.998Eth on day 5. Purchased on day 1. (loss of -592.8 €)
But 0.002 remain undeclared. I guess there are a few options:
- I could declare them as a cost, by multiplying the units by the exchange price at the time of each transfer.
- The transfers are considered a use of virtual currency, like when you buy a product or service with eth. In this case the fees are taxable event in of themselves. This seems unlikely, as it is similar to "loosing" units of a stock that you can't sell anymore, when it is in practice a loss for owner of the asset.
I will call Vero and ask them directly. I can post their answer there after.
Another aspect is that these calculations are not too complicated and I feel I can do them myself, but there are always these details that later may turn out to be different than what was interpreted. Should I get an accountant to do this?
Thanks!