ZenLedger is simplifying DeFi and cryptocurrency taxes for investors and tax professionals. Technical briefing by Patrick Larsen & Dan Hannum.
Overview of briefing
00 – 2:00
Patrick begins with a brief explanation of ZenLedger. He goes on to talk about how different countries (i.e. El Salvador, Panama, Paraguay, United States, Switzerland etc.) are handling crypto currency and how this will lead to an accounting mess.
In the United States, things are still unclear as to how crypto currency will be handled with little legislation.
2:20 – 3:25
Patrick shifts to the ZenLedger app. He goes on to talk about the importance of data integration and how most exchanges have APIs and diff jurisdictions have firewalls which will present a challenge around the world. He explains that the ZenLedger platform presents everything in one place with daily portfolio tracking and how they are one of the few companies that see all transactions whether they are on exchange or on wallet on chain or off chain.
3:25 – 4:05
Patrick goes on to explain what a taxable event really is. Buying crypto with U.S. currency is not a taxable event. However, once you own a crypto coin or stable coin and you purchase a different crypto currency with that crypto or you go back to fiat, that is taxable whether it is a gain or loss. These are taxable events that need to be reported.
4:05 – 4:50
He demonstrates how you can import from various cryptocurrency exchanges (i.e. Coinbase) and also defunct exchanges to claim lost or stolen bitcoin. He shares how lost or stolen bitcoin is accounted for at the cost basis that it was acquired.
4:50 – 6:00
He shows on the ZenLedger dashboard that you can upload CSV files or import on chain transactions from various blockchains. He shares that many individuals are earning income in cryptocurrency which has to be claimed and you must report that income tax. An example he shares is around NFTs. If you are making and selling NFTs, that is income. If you are buying and trading NFTs, that may be collectible income or a taxable event, securities income, capital gains from buying and selling ethereum. This is still a grey area.
6:00 – 6:30
Patrick clicks into the Taxes tab and begins explaining how they can output to your tax forms, produce full audit reports and produce tax loss harvesting reports. They have error checking in place to notify you in the case that you are missing your my ether wallet which is why you have income that non-taxable self transfers.
6:30 – 6:50
Patrick talks about all the ways they can support you whether that’s through chatting with someone on their CS team or them working directly with your tax professionals. You can also schedule time to talk with highly trained CPAs.
6:50 – 7:45
Patrick explains the different people ZenLedger works with like ultra high networth practices and multinationals as well as single investors in everything in between with crypto hedge funds or private equity funds.
7:45 – 9:00
Patrick shows an example of a wallet on the ZenLedger dashboard so you can see on each exchange what currency you are holding. He goes on to talk about the other data you can track such as when you acquired something, which accounting method you used and how much you should sell it at. It makes recommendations on how to free up cash or how to capture a tax loss asset.
9:00 – 9:45
Patrick shows in a spreadsheet an example of a full audit report which includes all fiat/crypto movement, all non taxable self transfers, current holdings, automatic error checking and taxable events stacked up long term or short term organized by year. This is used to create the tax forms. He shares how to help with all of your overseas holdings as well.
9:45 – FIN
Patrick concludes by sharing that they are similar to TurboTax for crypto except they also have investigative tools. They help save you and your tax professional time while uncovering how to optimize your taxes and provide you with a full audit report.