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Tax Treatment on ETH to BETH

Binance

Cryptocoins Exchanges / Binance 215 Views

Hi there

I've been doing some reading about how the Australian Tax Office (ATO) will probably consider the tokenisation of ETH to BETH as a disposal/trade of cryptocurrency, which means that it is a taxable event (and you'll be up for a capital gain tax or loss).

For example, I staked 1.0 ETH through Binance, and was given 1.0 BETH. I receive staking rewards in BETH. Because of the way Binance tokenised the ETH into BETH, The ATO will say that i "sold" my ETH and bought BETH in its place. When we're allowed to unstake our ETH maybe end of next year, presumably we 'swap' it back for ETH. The ATO will look at this as yet another sale, and so another Capital Gain would apply. So i get taxed to swap ETH to BETH, and taxed to swap BETH back to ETH. Not ideal. Really not ideal if the price of Eth increases. let me explain:

Imagine that ETH (and hence BETH) soars in value next year. for example, let's pretend ETH doubles from ~5k to ~10k. When i unstake my ETH, i think i would have to pay capital gains tax on the 5k increase in price. This is not cool, because really I was just trying to stake my ETH to earn some interest - but now it looks like i'll be stuck with a capital gain, and maybe a very big one. If the cost of ETH will soar, and I will be too scared to swap it back to BETH, because if i swap it, i'll be up for a bunch of capital gains tax that i can't afford. The only way to afford the tax that i'll be liable for is to actually sell the ETH immediately for AUD and put the money aside to pay off the tax man.

So, a few questions:

Given my concern above about avoiding a high capital gain, is there any way i can take out my money now (at a loss)? For example, can i just convert my BETH back to ETH now, and then when the 2.0 thing is launched, i won't have any ETH left to claim and so i can avoid that capital gain? i know it's a shame to miss out on staking rewards, but i would just hold the ETH and let it appreciate in value.

Does everything i'm saying above check out?

And what are my options?

thanks

daniel

submitted by /u/Desperate_Coach4481
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