In this article, we will explain how to handle ETH2 transactions.
Some exchanges label ETH staking transactions as ETH2 to distinguish between staked and non-staked ETH.
Despite its name, ETH2 holds the same value as regular ETH. To ensure that the ETH balances get reflected correctly in your account, ETH needs to be converted from ETH2 to ETH as soon as the tokens get unstaked.
There are two different options to convert ETH2 to ETH:
Please note: The decision on what option to use should be made in consultation with a tax advisor.
1) Entering a Swap transaction to convert ETH2 to ETH
2) Entering a Trade transaction to convert ETH2 to ETH
1) Entering a Swap transaction to convert ETH2 to ETH
To avoid capital gains or losses, as well as a restart of holding periods, we recommend using the transaction type "Swap". This will classify the operation as tax-free and transfer the cost base as well as the holding period to the new coin.
To enter a Swap, go to Transactions -> "New" and select "Swap (non-taxable)":
Add your transaction details and click on "Update".
2) Entering a Trade transaction to convert ETH2 to ETH
If it's a taxable transaction, the transaction type "Trade" should be used. By using the transaction type "Trade" the holding periods will be restarted. Furthermore, your old coin gets removed from your purchase pool and the tax relevant value difference between its purchase and sale values gets calculated. The new coin begins its holding period on the day of the trade and adopts the asset value from that day.
To enter a Trade, go to Transactions -> "New" and select "Trade":
Add your transaction details and click on "Update".
