How Does a Physically Settled Crypto Future Differ in Tax Timing from a Cash-Settled One? ⎊ Path

How Does a Physically Settled Crypto Future Differ in Tax Timing from a Cash-Settled One?

The primary difference in tax timing is that a cash-settled future realizes a final capital gain or loss on the settlement date. A physically settled future does not realize a final gain or loss on the contract itself until the underlying crypto is eventually sold.

The physical settlement is merely the acquisition or delivery of the asset, which starts a new holding period.

How Does the Timing of Settlement for a Crypto Future Impact the Tax Year of the Gain or Loss?

What Is a “Liquidity Bootstrapping Pool” (LBP) and How Is It Used for Capital Acquisition?

What Are the Tax Implications of Cash Settlement versus Physical Settlement?

What Is the Role of the Settlement Price Index in Cash-Settled versus Physically-Settled Options?

Does the Tax Treatment Differ If the Option Is Cash-Settled?

Does Physical Delivery Create a Taxable Event, and If So, When?

If a Future Settles on December 31st, When Is the Gain or Loss Realized for Tax Purposes?

What Is the Tax Implication Difference between Physical and Cash Settlement?

Glossar

Physically Settled

Settlement ⎊ Physically settled derivatives contracts require the actual transfer of the underlying asset from the short position holder to the long position holder at maturity.