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Examples: "How are staking rewards taxed?" • "NFT royalties income" • "Cost basis methods"
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I wrapped my ETH into WETH to bid on an NFT. Is that a taxable event?
Short Answer: Generally, No (but be careful).
Detailed Explanation: Wrapping ETH (WETH) is technically a swap of one token for another. However, because WETH is pegged 1:1 to ETH and serves as a "wrapper" rather than a distinct asset with different utility or value, many conservative tax professionals treat it as a non-taxable event (similar to moving money between two checking accounts).
However, the IRS has not explicitly ruled on "wrapping." Strict interpretation could argue it is a property-for-property exchange (taxable).
CryptoForms Approach
By default, CryptoForms treats WETH wrapping/unwrapping as non-taxable to avoid generating thousands of tiny "gains" or "losses" from minor price slippage. You can change this in Settings.
TRAINED ON TAX LAW
Most AI models hallucinate when asked about specific tax codes. Aurora is RAG (Retrieval-Augmented Generation) enhanced with a verified legal database.
IRS Guidance
Indexed with every IRS Notice, Revenue Ruling, and Chief Counsel Advice memo related to cryptocurrency from 2014 to present.
Smarter Contracts
Understands smart contract interactions. Can explain what a "claim" function actually did in the code, not just what the wallet says.
Simplified English
Translates "Section 1031 like-kind exchange pre-2018 applicability" into "No, you can't swap Bitcoin for Ethereum tax-free."