Disclaimer: In most tax jurisdictions, selling crypto assets for another asset such as cash (fiat currencies) or a different crypto, is considered a taxable event. If the seller had unrealized-gains on the crypto that was sold, it is likely that the seller will be subject to capital gains tax. On the other hand, borrowing crypto is not considered to be a taxable event, just like taking a loan out from a bank is not. At a technical level, the user of Tax Heaven is submitting collateral to the protocol and taking out a crypto loan. The loan has to be paid back for the user to retrieve their collateral. Tax Heaven is not providing any tax or financial advice and the content on this website should not be considered as such. Consult your tax, financial or legal advisor before using Tax Heaven.
Lend your BNB, BEP-20 token, or a token you purchased and have stored on binance and borrow the same token.
All loans are interest free and the collateral factor always stays constant.
Take out 99.5% of the value you put up as collateral.
Only 0.5% fee to use the Tax Heaven protocol!
Do you want to trade BNB for Bitcoin but don’t want to trigger a taxable-event? Then use the Tax Heaven protocol (on Binance Smart Chain) to borrow BNB against your BNB collateral. The borrowed BNB can be used to buy Bitcoin!
So if the collateral factor always stays constant, and the loans are interest free, does one have to pay back the loan??? (Ask no further!)
“TAX-BSC” is Tax Heaven on Binanc Smart Chain’s native token.
The 0.5% fee that is charged when using the Tax Heaven protocol is distributed to people staking the TAX-BSC token.
The TAX-BSC token is distributed to depositors of “whitelisted tokens”.
The amount of TAX-BSC tokens that the depositors receive is based on the value of the token (determined using Chainlink price feeds) that is being deposited to the protocol.
Caution: The TAX-BSC token on Binance Smart Chain and the TAX token on Ethereum are completely different tokens. They reside on different blockchains and have no compatibility.
Debit Account | Debit Amount | Credit Account | Credit Amount |
---|---|---|---|
Deposit (Asset) | 9.95 BNB | BNB (Asset) | 10 BNB |
Fee (Expense) | 0.05 BNB |
There should also be a journal entry to account for the TAX-BSC token that is distributed to the user when assets are deposited to the protocol. This should be a taxable event in most jurisdictions.
Debit Account | Debit Amount | Credit Account | Credit Amount |
---|---|---|---|
BNB (Asset) | 9.95 BNB | Loan (Liability) | 9.95 BNB |
Debit Account | Debit Amount | Credit Account | Credit Amount |
---|---|---|---|
BTC (Asset) | 0.3 BTC | BNB (Asset) | 9.95 BNB |
Note: If the price of BNB in fiat terms increases between the time the loan is taken out and when BNB is sold for BTC, this could lead to a taxable event resulting in capital gain taxes.
Debit Account | Debit Amount | Credit Account | Credit Amount |
---|---|---|---|
Loan (Liability) | 9.95 BNB | BNB (Asset) | 9.95 BNB |
BNB (Asset) | 9.95 BNB | Deposit (Asset) | 9.95 BNB |