In this article, we’re going to show you how to properly enter vault transactions in CoinTracking.
There are more than just one type of different vaults, but we used one specific example, since it is very prominent.
Here's a guide on how to enter vault transactions, using an AAVE vault as an example:
1) Deposit of funds (2.00009484 ETH) into your wallet
2) Bridging over ETH to AWETH into the AAVE vault
There are two different options to bridge ETH to AWETH
Please note: The decision on what option to use should be made in consultation with a tax advisor.
Important: Some types of vaults don't convert their coins into another coin when locking them.
a) Entering a Swap transaction to convert ETH to AWETH
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.
b) Entering a Trade transaction to convert ETH to AWETH
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.
3) Send Collateral of 2 AWETH to AAVE vault
4) Borrowing Fee of 0.00002626 ETH
5) Receive Loan of 12570 USDT from AAVE vault
Important: For some types of vaults, you can receive more than one loan at a time.
6) Trade 12570 USDT for AWETH
7) Send Collateral of 4.00004343 AWETH to AAVE vault
Please note: If you want to learn more about how to enter loans and their repayments in general, please see the following article: Loans and their repayments