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Handling Celsius Settlements in CoinTracking

Celsius is now paying out settlements for various coins. In case you have imported Celsius data into your CoinTracking account in the past, there are several options available to enter the repayments correctly in CoinTracking. 

There are three options:

1) Only record net difference as Lost

2) Mark as transactions as Lost and settlements as income 

3) Keeping original coins 

1) Only record net difference as Lost

If you haven't filed a tax report with Lost transactions yet, keep the original coins in Celsius and only mark the net difference as "Lost". 

This only works if the tax report has not been filed with the "Lost" entries.

2) Mark transactions as Lost and settlements as income

Mark previous coins as "Lost" and add new settlement coins as "income (taxable or non-taxable)".

After you entered all previous coins as "Lost", you need to enter the new coins as "income or income (non-taxable)" to re-establish them with a cost base. The income entry would also mean, that you see these values in your income report - which might seem incorrect, since these are coins you used to own.
If you enter it as "income (non-taxable)", there would be no record in the income report, however the tax authorities might have questions. 

3) Keeping original coins

Treat settlements as Deposit instead of Lost transactions. Mark the Lost transactions as Withdrawal.

If you previously owned ETH and BTC, you could also argue that you never lost those coins and instead of "Lost", you enter a "Withdrawal" and later the settlement comes in just as a "Deposit". As if those are still your same coins that were temporarily out of reach.
This might not be correct from a tax point of view, since you would keep the original cost base and holding period of ETH and BTC. Furthermore, you definitely did not get the same coins back as you initially lost. So this might be hard to argue with the tax authorities. 

The optimal choice depends on your specific circumstances and guidance from tax professionals. If you're uncertain about which option to select, consider consulting a tax advisor for personalized advice. 

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