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2023-03-31

How Investing vs Trading impacts tax

In most cases of buying and selling cryptocurrency as a retail investor, you are participating in investing rather than trading. The two are treated differently for tax purposes.

  • Investing is subject to capital gains tax or income tax, depending on the nature of the transaction.
  • Trading in this case refers to self-employment which is subject to income tax and National Insurance Contributions.

The key difference between investing and trading – along with the different tax treatments, is how losses generated in the crypto-activity can be used.

In their guidance, HMRC have explicitly stated that they would expect it to be exceedingly rare that any crypto-activity constituting buying & selling crypto would be classified as “trading”.

If you are uncertain, speak to a tax advisor as there are always exceptions, including but not limited to, developing tokens and large scale mining.

How is crypto tax calculated in the United States?

You can be liable for both capital gains and income tax depending on the type of cryptocurrency transaction, and your individual circumstances. For example, you might need to pay capital gains on profits from buying and selling cryptocurrency, or pay income tax on interest earned when holding crypto.

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Product update - 23rd May 2022

At Summ (formerly Crypto Tax Calculator), we are constantly working on improving our product so you can have the best experience at tax time. Check out our blog for the latest product updates.

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This tax guide is regularly updated: Last Update  
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New Integration and Features

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We’re excited to announce that our integration with Cronos is now live!

Simply copy and paste your Cronos wallet addresses in the 'Import Data' page, and we will pull in all of your Cronos transactions.

Support for ERC-1155 transactions

We are now able to process and reconcile transactions involving ERC-1155 tokens. This includes minting, buying, selling and converting a ERC-721 to a ERC-1155. This is applicable for: Ethereum, Polygon, Avalanche, BSC, Fantom and Arbitrum.

Add comments on transactions and new comment filter

Have you ever found yourself wanting to flag and come back to a certain transaction? Or perhaps, wanting to write down further context for your future self or your accountant? This is where our new comment functionality comes into use. You are now able to leave comments on transactions, filter by transactions with comments, as well as delete comments.

New report: German SO report

German users can now generate the SO report, with all the relevant fields already pre-filled with their data. In order to gain access to this report, head to the 'Get Report' page, and select the SO report. Note that this report is only available in PDF format.

New report: Canada TurboTax report

Canadian users can now download a Canada Turbotax PDF. Users can paste those values into TurboTax Online to file their reports to the CRA.

New category: collateral withdrawal

In addition to our existing 'collateral deposit' category, we’ve now added a collateral withdrawal category. This category can be used for withdrawing collateral from a borrowing and lending protocol, where the asset moves back into your wallet.

Accountant feature: revoke access to team members

For users on our accountant plan, admin accountants can now revoke access to team members. By revoking a team member's access, they will no longer be able to access your Accountant Dashboard. Any client data which they have been working on will be saved, and will still be accessible by any other invited team members.

De informatie op deze website is van algemene aard en houdt geen fiscaal, boekhoudkundig of juridisch advies in. Het is opgesteld zonder rekening te houden met uw doelstellingen, financiële situatie of behoeften. Voordat u op basis van deze informatie handelt, dient u de geschiktheid van de informatie te overwegen, rekening houdend met uw eigen doelstellingen, financiële situatie en behoeften, en professioneel advies in te winnen.
Summ (voorheen Crypto Tax Calculator) wijst alle garanties, toezeggingen en garanties af, expliciet of impliciet, en is niet aansprakelijk voor welk verlies of welke schade dan ook (inclusief menselijke of computerfouten, nalatigheid of anderszins, of incidentele of gevolgschade) voortvloeiend uit of in verband met, enig gebruik van of vertrouwen op de informatie of adviezen op deze website. De gebruiker moet als enige de verantwoordelijkheid aanvaarden die verband houdt met het gebruik van het materiaal op deze site, ongeacht het doel waarvoor dergelijk gebruik of dergelijke resultaten worden toegepast. De informatie op deze website is geen vervanging voor gespecialiseerd advies.

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