How to do your Nexo Taxes
Nexo exchange is a leading digital asset institution that offers both conventional and cryptocurrency financial services. It is a simple all-in-one platform that allows its users to buy and sell crypto and its lending functionality allows its users to earn interest on their crypto investments. The rate of interest may vary due to the distribution method and coin, but users can expect 6 percent to 12 percent APY.
This Switzerland-based exchange is highly regulated and therefore, it is less vulnerable to the evolving US regulations of crypto lending platforms. In this review, we will discuss the exchanges’ services, what it has to offer, and even Nexo taxes. Let’s get started.
Connecting your Nexo Address to ZenLedger For Your Nexo Tax Forms
Within ZenLedger, select the Exchange you want to import on the Import Transactions page and Exchanges tab. Then you'll see a table that outlines the possible methods. We support a direct API code import for many centralized exchanges, while others may require a CSV import. Decentralized exchanges may require a wallet address.
To import your transactions from an exchange, simply navigate to the "Exchanges" tab of the "Imports" page. Select the exchange that you are looking to import, and instructions will be provided for that specific exchange!
Nexo exchange users can get quick crypto-backed loans without going through a credit check. But what makes this loan even more interesting is that the borrowing rates start from 0 percent and monthly payments are not mandatory. This is beneficial while calculating Nexo taxes because the tokens are not converted into fiat currency.
However, you have to go through basic or advanced identity verification based on the amount of credit you want to take. You may also be prompted to present supporting documents. Other than this, you don’t have to provide any document as per the eligibility criteria.
As soon as you’re verified, you can start the borrowing process, which goes like this:
- Deposit crypto in your account. All fiat currency loans are at least 200 percent crypto collateral backed. Ergo, if you want to take out $25,000, you have to put down collateral of $50,000 in the form of Bitcoin or any other altcoin. A few coins that you can deposit are BTC, ETH, XLM, XRP, BCH, LTC, LINK, EOS, PAXG, BNB, and NEXO. The list of collateral coins consists of 38 coins, but new coins are added regularly on the platform.
- The second step is to click on “Withdrawal Funds from Credit Line.” After that, you’ll be able to see the amount of loan available and two asset class finance options.
- The first option consists of a fiat currency loan, which requires your bank account information. The second option is to get it in USDC (USD Coin) or (USDT) Tether, which requires you to provide your wallet address.
It is important to note that the increase in the market value of your asset is directly related to your loan limit. If the market value increases, so do the value of your assets. In case of the value decreases, it makes your collateral insufficient and you have to add more funds to get the loan. The minimum amount of loan you can get from Nexo exchange is $50 for stablecoins and $500 for fiat and the maximum amount of $2,000,000. These crypto-backed loans can be spent as per the borrower’s needs.
The annual interest rate paid for the loan relies on the percentage of your portfolio balance held in the exchange’s native coin, NEXO. As a Nexo exchange user, you must know that the combination of your savings wallet and credit line makes up your portfolio balance.
Like any other crypto token, the value of the NEXO token changes according to the demand. You can buy the native token on the Nexo exchange or any other major crypto exchange with either fiat or any other supported cryptocurrencies.
Borrowing rates begin from zero percent and if you hold more than 10 percent of your portfolio in NEXO toke, you can get extra benefits and deductions. The exchange will debit the interest from your available limit and you can repay the amount at any time.
Moreover, you can repay using fiat currencies such as USD, GBP, and EUR. You can even pay it in crypto or even both. In fiat, there’s no minimum repayment amount, but if you repay with crypto there is a minimum repayment amount.
You can borrow three times the value of your portfolio with Nexo Booster. The assets you currently own become the collateral until you pay the credit off. The Instant Crypto Credit Line processes swapping and borrowing simultaneously to eliminate slippage. If your asset appreciates in value, you can retain the profit by returning your credit.
If you use the Nexo wallet, you can earn interest by holding your crypto and fiat. The wallet supports crypto tokens such as BTC, XLM, and XRP, and fiat such as USD, EUR, and GBP. Nexo exchange claims that you can purchase crypto within seven seconds, so it means that fiat deposits are instant.
APR rates will depend on the saving terms and the number of tokens you own. The exchange offers daily pay-outs and the interest rates may differ by the asset type and loyalty level. The highest rate on stablecoins is 12 percent and for crypto, it is 16 percent.
How to Report your Nexo Taxes?
As mentioned earlier, ZenLedger is an excellent way to report your Nexo taxes. By importing your transactions on ZenLedger, you easily get your cost basis, fair market value, and gains/losses for your transaction history. It even automatically generates your Nexo tax forms. After that, you just review your transactions and file your taxes, making Nexo tax reporting easy.
Nexo is an incredible exchange for you to buy and sell cryptocurrencies and also earn interest on your tokens and fiat currencies. You can even borrow cryptocurrencies to trade and make a profit. It is an excellent combination of conventional and cryptocurrency financial services. Also, reporting Nexo taxes is also super easy. With the features and functionalities that it offers, it is absolutely worth it.