I have a bunch of old wallets that I started using again. I want to track properly for taxes this time. But these wallets have tons of transactions from earlier that I didn’t manage properly to keep everything correct in Koinly.
Is there a way to have Koinly ignore any transactions before a certain date? IE say October 1st of this year?
Yes!
You can set an API start date, this option is under the Advanced tab when setting up an API connection in Koinly.
When cleaning up by synching with a specific start date:
How are long term trades (> 1 year) affected by this?
2 Examples
I bought 1 BTC in 2021 and I sync the wallet/exchange beginning 1.1.2023
→ no buy trade of BTC in Koinly, just the balance of 1BTC.
When selling 0.5 BTC in 2023, is this considered long term?
I bought 1 BTC in 2021 and I sync the wallet/exchange beginning 1.1.2022 with no (or max 0.5 BTC) sale trade during 2022.
→ no buy trade of BTC in Koinly but a 1+ year old 1 BTC balance; within 1+ year only sale trade of 0 to 0.5 BTC.
When selling 0.5 BTC in 2023, is this considered long term?
I’d guess that probably 1) is not the case and 2) is the case, can somebody confirm this?
If 2) is not the case or in general: If it is (nearly) impossible to track really all buy trades, what is the easiest/best way to track long term trades properly?
@liferiot Hey, apologies for missing that part.
No, it will be short term and the 0.5BTC will have a missing purchase history error associated to it, as well as the potential of a 0 cost-basis. If you decide to choose a start date as above, you’d need to add in a manual Deposit for this BTC on the day you purchased it, and also update the worth to equal the amount you paid in FIAT.
Again no, the holding period is set from when Koinly first sees you interract with the token, the balance reported by the API is not considered in the final calculations at all, the reports and figures are made up of imported/calculated data.
For that reason, I believe your method is not actually going to achieve what you need it to, unless you add in manual deposits for Koinly to register the buys.
@Ali_Koinly thx for clarification and this matches with the tests I did today.
for me this is actually a very bad scenario
i am actually very disappointed that the software does not support me at all when importing only for 1 or 2 years for the standard usecase to calculate short term earnings.
for my understanding quite simple settings would do the trick:
a) checkbox “use current price instead of 0-cost basis for missing purchases” → my dashboard would be correct
b) checkbox “use long term for missing purchases” → simple and powerful
c) checkbox “exclude all sell trades with missing purchases” → simple and powerful
d) when importing or after importing for missing purchases: a feature to add a buy trade at the very beginning of the import or specific date with cost “0” with one click; ideally bulk (-> so basically same as 0 cost basis, but the earnings will be correctly put to long term
Arent these 4 practical solution and quite easy to implement? Even a combination makes sense.
Actually i’d expect at least one of the 4 solutions from a software that I buy to be able to calculate my earnings/taxes with a few clicks correctly. The usecase is simple in case 2) of my last post the system "knows"hat the sale is long term, but i have no chance to make it ling term without a complicated manual entry.
Any chance Koinly will go for one or more?
@liferiot
Interesting ideas, but dont you see a certain risk associated with this?
Lets assume we implemented point a) - How would you prove to your tax authority that you paid market price for this asset, without any evidence of data, should they choose to audit you?
I imagine most tax offices are of the view that if you cannot prove it, it must be considered 0 cost.
Regardless, I am not a qualified tax specialist so I cant comment on what is compliant or is not - however, I am more than happy to create this as a feature request, for the team to consider.
As a short term workaround, you could import the data from your desired start date - and then navigate to the missing purchase history page.
Here it will give you an overview of each asset with an associated mph, and you could then add a single deposit for a date of your choice for the whole amount. This would get rid of the errors, and also allocate the desired holding period - you probably already knew this, but for the sake of anyone viewing the thread it’s for you!
Interesting ideas, but dont you see a certain risk associated with this?
not at all when this is an optional setting. a simple and short information text in the app does the trick and a user activating it should know what they do
if you want to be bullet proof on your end, you could add warnings, also in reports.
How would you prove to your tax authority that you paid market price for this asset, without any evidence of data, should they choose to audit you?
If a tax authority asks me, I can query e.g. in Kraken the transaction history for one coin and show that there was no sale for 1+ year. The first and main goal is to prove this long term holding - and if there is a not manipulated history of that 1 year, this actually the needed evidence of data. You could save a lot of time here with the suggested options.
In the rare scenario that tax authorities want the full history, I could still do the work (or let them do it) to reconstruct the full history of that coin.
I imagine most tax offices are of the view that if you cannot prove it, it must be considered 0 cost.
my proposal a) would be used for me personally to calculate gains properly for a certain period.
to be clear: when i want to calculate my gains for the year 2023, why would I need a complete history over years?
my other presented options have nothing todo with 0 cost basis but to long term assignment (for me higher prio and I think for many a use-case, no?!
I see, as mentioned I’m happy to create a request but by no way does that mean it will definitely go ahead, or it will be implemented any time soon.
I’ll post the links so you may upvote the ticket and also add your own comments should you wish to 