There are two possibilities to enter a loan and its repayment into CoinTracking, depending on how you and your country's tax laws see the ownership during the loan:
1) You loaning to others
2) You receiving a loan
1) You loaning to others
There are two different options loaning to others:
a) You remain the owner of the coins which you loan
b) You don't remain the owner of the coins which you loan
a) You remain the owner of the coins which you loan
For this method your coins will stay legally yours, will remain in the FIFO sequence of your purchase pool and thus retain their original cost base.
b) You don't remain the owner of the coins which you loan
This will trigger a capital gains calculation for the difference in value between the purchase of the coin and the spend and the coins will be taken out of your purchase pool. When you get the repayment, enter it as Income.
2) You receiving a loan
To initiate the process, select "Send Collateral".
When you receive a loan from the platform, ensure to document this transaction as "Receive Loan," clearly marking the acquisition of funds. If at any point you decide to repay the borrowed amount, you should select "Repay Loan" to reflect this action within the system.
In scenarios where your loan balance exceeds the critical margin and enters liquidation, the appropriate response is to choose "Liquidation”. Finally, don't overlook recording the fees as "Borrowing Fee," ensuring all financial activities related to the loan are meticulously tracked and accounted for.
Example: A loan of USDT with ETH collateral
1) Receiving the loan:
a) Send the collateral for the loan
b) Establish the loan as receive loan
2) Repayment of the loan:
a) Repay the loan
b) Enter the borrowing fee
c) Receive the collateral after repaying the loan
3) Liquidation of the loan
