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Last December, it was decided that the customers of the US crypto exchange Celsius, where bankruptcy proceedings were opened in 2022, will be paid dividends. The Swedish Tax Administration has now taken a closer look at how Norwegian Celsius owners should handle this in relation to the tax return. According to the Tax Administration, the dividend is considered a realization, which will give taxable gain or deductible loss in 2023.
The handling of Celsius was one of the more problematic questions that Marius Johansen and Robert Aarestrup from Skatteetaten received when Kaupr invited 2 weeks ago to the Live Event on Crypto Tax 2023. You can still watch the broadcast in recordings, whether you are due to deliver your tax return today, you have a deferred deadline or you want to increase your knowledge of crypto and tax ahead of next year's tax release. Anthon Soegaard from EY and Erlend Ringstad from Kryptosekken also participated in the tax seminar.
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Regarding questions about the Celsius bankruptcy and the tax treatment for 2023 and 2024, for the record, we reproduce the full guidance from the Tax Administration below.
Timeline to be taken as a basis:
On July 13, 2022 Chapter 11 bankruptcy proceedings were opened in the United States for the crypto exchange Celsius.
December 27, 2023 it was finally decided that Celsius customers, with embedded values in cryptocurrency at the time of bankruptcy, would be paid dividends. Customers were to get a share of the market value of their cryptocurrency as of July 13, 2022 converted into USD. This dividend amount in USD was to be paid in 2024. The payout would be made in money or in the form of the cryptocurrencies BTC and ETH, as well as shares of MiningCo according to different criteria that were set up. From this point on, customers no longer had any cryptocurrency held by Celsius, but they had a claim to a dividend, i.e. a claim.
On January 16, 2024 a letter was sent out stating that the payment of the dividend was commenced and that the value of the dividend was fixed. For customers who were going to have all or part of the dividend paid out in cryptocurrency, the rate for BTC was set at $42,973 and for ETH $2,577.
2023
The realization of cryptocurrency produces taxable gain or deductible loss in 2023.
The value of the call received in 2024 will be the output value of the cryptocurrency you had on Celsius. The starting value is the total value of the dividend indicated in the individual's letter of allocation, converted into USD/NOK as of December 27.
Input value — output value = gain/loss
Asset Value 2023 the value of the receivable will be converted into USD/NOK as of January 1, 2024.
2024
Realization of receivable yields taxable foreign exchange gain in 2024
The value of the receivable is determined in USD and has the same value in USD until payment. In the period from December 27, 2023 until payment, the USD/NOK rate increases and the starting value of the receivable in NOK therefore becomes higher and yields a foreign exchange gain.
This calculation will be:
Output value of the receivable in NOK — input value of the receivable in NOK = foreign exchange gain.
The entry value of the receivable is the same amount as the output value of crypto at Celsius 27.desesmber 2023.
In the case of the realization of the received cryptocurrency and shares, it will in the usual way give taxable gain or deductible loss.
In the event of the possible receipt of additional dividends at a later date in the form of money, cryptocurrency or other, it is monetized at the time of receipt at market value.
Example:
The entry value of your cryptocurrency at Celsius as of 2022 was 100,000 NOK and the market cap was 200,000 NOK. It is assumed that these were realized on December 27, 2023 and that you received a claim against the estate.
On January 16, 2024, you received a letter stating that you would receive a dividend with values worth 12,000 USD. Distributed by 3,474 in BTC, 3,474 in ETH and 5,052 in MiningCo (now renamed Ionic Digital) shares.
For 2023 then a gain or loss is realized for your cryptocurrency at Celsius.
The starting value will be the value of the receivable, 12,000 USD with the exchange rate to USD/NOK in as of December 27. The exchange rate of USD was NOK 10.15 on December 27th.
Your cryptocurrency output value at Celsius will then be 12,000 X 10.15 = 121,800 kroner.
The calculation of gain or loss then becomes output value minus input value, which is
121,800 — 100,000 = 21,800.
In 2023, the value of the USD 12,000 will be converted into Norwegian kroner at the end of the year. The USD/NOK exchange rate was 10.30.
The calculation will be 12,000 X 10,30 = 123,600 kroner.
For 2024 there will be a taxable foreign exchange gain corresponding to the change in value from 27 December 2023 until payment. If the dividend was paid on January 16, 2024, USD/NOK was 10.41 and the starting value would then be 12,000 X 10.41 = 124,920. The entry value of the receivable is the same as the exit value of realized crypto at Celsius 121,800 kroner.
The calculation of the foreign exchange gain will be: 124 920 — 121 800 = 2 997
Profit from the sale of the cryptocurrency and shares that you received in 2024 is calculated in the usual way. The entry values are as mentioned in the second paragraph above, where 12,000 USD in values are distributed with 3474 in BTC, 3474 in ETH and 5052 in MiningCo shares. For input value in NOK, the rate on the date of receipt is used, in this case 10.41.
The input values in NOK are then
3474 X 10.41 = 36164.34 for received BTC
3474 X 10.41 = 36164.34 for received ETC
5052 X 10.41 = 52,591.32 for MiningCo shares received
Sum = 124,920
Realization of the received cryptocurrency and shares, will in the usual way produce taxable gain or deductible loss.
In the event of the possible receipt of additional dividends at a later date in the form of money, cryptocurrency or other, it is monetized at the time of receipt at market value.
The letter to all previous Celsius customers who were entitled to a payout indicated a value the individual would receive in USD. This value in USD is
The value in USD must be converted to NOK to give correct
Last December, it was decided that the customers of the US crypto exchange Celsius, where bankruptcy proceedings were opened in 2022, will be paid dividends. The Swedish Tax Administration has now taken a closer look at how Norwegian Celsius owners should handle this in relation to the tax return. According to the Tax Administration, the dividend is considered a realization, which will give taxable gain or deductible loss in 2023.
The handling of Celsius was one of the more problematic questions that Marius Johansen and Robert Aarestrup from Skatteetaten received when Kaupr invited 2 weeks ago to the Live Event on Crypto Tax 2023. You can still watch the broadcast in recordings, whether you are due to deliver your tax return today, you have a deferred deadline or you want to increase your knowledge of crypto and tax ahead of next year's tax release. Anthon Soegaard from EY and Erlend Ringstad from Kryptosekken also participated in the tax seminar.
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Regarding questions about the Celsius bankruptcy and the tax treatment for 2023 and 2024, for the record, we reproduce the full guidance from the Tax Administration below.
Timeline to be taken as a basis:
On July 13, 2022 Chapter 11 bankruptcy proceedings were opened in the United States for the crypto exchange Celsius.
December 27, 2023 it was finally decided that Celsius customers, with embedded values in cryptocurrency at the time of bankruptcy, would be paid dividends. Customers were to get a share of the market value of their cryptocurrency as of July 13, 2022 converted into USD. This dividend amount in USD was to be paid in 2024. The payout would be made in money or in the form of the cryptocurrencies BTC and ETH, as well as shares of MiningCo according to different criteria that were set up. From this point on, customers no longer had any cryptocurrency held by Celsius, but they had a claim to a dividend, i.e. a claim.
On January 16, 2024 a letter was sent out stating that the payment of the dividend was commenced and that the value of the dividend was fixed. For customers who were going to have all or part of the dividend paid out in cryptocurrency, the rate for BTC was set at $42,973 and for ETH $2,577.
2023
The realization of cryptocurrency produces taxable gain or deductible loss in 2023.
The value of the call received in 2024 will be the output value of the cryptocurrency you had on Celsius. The starting value is the total value of the dividend indicated in the individual's letter of allocation, converted into USD/NOK as of December 27.
Input value — output value = gain/loss
Asset Value 2023 the value of the receivable will be converted into USD/NOK as of January 1, 2024.
2024
Realization of receivable yields taxable foreign exchange gain in 2024
The value of the receivable is determined in USD and has the same value in USD until payment. In the period from December 27, 2023 until payment, the USD/NOK rate increases and the starting value of the receivable in NOK therefore becomes higher and yields a foreign exchange gain.
This calculation will be:
Output value of the receivable in NOK — input value of the receivable in NOK = foreign exchange gain.
The entry value of the receivable is the same amount as the output value of crypto at Celsius 27.desesmber 2023.
In the case of the realization of the received cryptocurrency and shares, it will in the usual way give taxable gain or deductible loss.
In the event of the possible receipt of additional dividends at a later date in the form of money, cryptocurrency or other, it is monetized at the time of receipt at market value.
Example:
The entry value of your cryptocurrency at Celsius as of 2022 was 100,000 NOK and the market cap was 200,000 NOK. It is assumed that these were realized on December 27, 2023 and that you received a claim against the estate.
On January 16, 2024, you received a letter stating that you would receive a dividend with values worth 12,000 USD. Distributed by 3,474 in BTC, 3,474 in ETH and 5,052 in MiningCo (now renamed Ionic Digital) shares.
For 2023 then a gain or loss is realized for your cryptocurrency at Celsius.
The starting value will be the value of the receivable, 12,000 USD with the exchange rate to USD/NOK in as of December 27. The exchange rate of USD was NOK 10.15 on December 27th.
Your cryptocurrency output value at Celsius will then be 12,000 X 10.15 = 121,800 kroner.
The calculation of gain or loss then becomes output value minus input value, which is
121,800 — 100,000 = 21,800.
In 2023, the value of the USD 12,000 will be converted into Norwegian kroner at the end of the year. The USD/NOK exchange rate was 10.30.
The calculation will be 12,000 X 10,30 = 123,600 kroner.
For 2024 there will be a taxable foreign exchange gain corresponding to the change in value from 27 December 2023 until payment. If the dividend was paid on January 16, 2024, USD/NOK was 10.41 and the starting value would then be 12,000 X 10.41 = 124,920. The entry value of the receivable is the same as the exit value of realized crypto at Celsius 121,800 kroner.
The calculation of the foreign exchange gain will be: 124 920 — 121 800 = 2 997
Profit from the sale of the cryptocurrency and shares that you received in 2024 is calculated in the usual way. The entry values are as mentioned in the second paragraph above, where 12,000 USD in values are distributed with 3474 in BTC, 3474 in ETH and 5052 in MiningCo shares. For input value in NOK, the rate on the date of receipt is used, in this case 10.41.
The input values in NOK are then
3474 X 10.41 = 36164.34 for received BTC
3474 X 10.41 = 36164.34 for received ETC
5052 X 10.41 = 52,591.32 for MiningCo shares received
Sum = 124,920
Realization of the received cryptocurrency and shares, will in the usual way produce taxable gain or deductible loss.
In the event of the possible receipt of additional dividends at a later date in the form of money, cryptocurrency or other, it is monetized at the time of receipt at market value.
The letter to all previous Celsius customers who were entitled to a payout indicated a value the individual would receive in USD. This value in USD is
The value in USD must be converted to NOK to give correct
