Ethereum transfer showing as gain

Koinly Support
1

Describe the problem:
Why do these transaction show as Capital Gains - these were just transfers, essentially transfer of Ethereum to purchase Component. They should not be capital gains Can you please advise?

Which exchange/wallet is this regarding?
Metamask - Ethereum purchase of Component

How did you import data into this wallet?
By public wallet address

What have you tried to fix this so far?
Tried to sync public facing addresses

2

yes this drives me nuts. Why is it doing this koinly support? I just did my tax so too late for the last tax year but I KNOW I ended up having more gains than I actually did.

Petur_Koinly 3

Hi all,

Is this transaction being displayed as a Withdrawal or as a Transfer?

If it is being displayed as a Withdrawal then you can see this article:
https://help.koinly.io/en/articles/3839630-why-are-transfers-between-my-own-wallets-showing-a-profit-loss

If the transaction is being shown as a Transfer then you are only seeing gains that have been realized from the transfer fee. We have a setting called ‘Treat transfer fees as disposals’ which you can turn off if you don’t want to realize gains on the transfer fees. See this article for more info on transfer fees and the different calculation methods:
https://koinly.io/blog/deducting-crypto-trading-transfer-fees/

4

how about “cost” transactions? How do stop realising gains on those?

Petur_Koinly 5

@Lara_Luz

It is not possible to treat costs as non-taxable events (you could tag them as ‘Lost’ but then they wouldn’t be considered as expenses).
I don’t believe there’s any country that allows that but it’s possible that there are some exceptions that I’m not aware of.

See this article for more info:
https://help.koinly.io/en/articles/4286070-why-is-there-a-profit-loss-on-cost-transactions

6

I think there is a case for “cost” transactions, at least here in Belgium in the situation where you declare profit as not taxable because you invested as a “bonus pater familias”. That is, origin money not speculative (not borrowed, not from trading etc), invested in a responsible way (stocks, crypto, …) can be free of taxes regardless of the amount of transactions etc.
In that discussion mining profits can also be free of taxes, as long as it’s local hobby mining at home and not a main source of revenue. In demonstrating all that costs are a part. If you mine ‘at cost’ or at a loss, there should not be a profit.
But you may have to split some activities at least in the reporting (why a tool like koinly helps a lot) so you can make a distinction.

Some cases for cost tagging I can think of (unclear if this will be allowed):

  • you buy koinly subscription and pay with crypto - realize the profit, but also deduct it as a cost to be able to report. You really made this expense in the realization of the profit.
  • you buy an online mining subscription that generates BTC income. I know there were/are a lot of mining scams and ponzi’s. Say you bought such a contract for 2BTC and only got 1BTC back through mining it would be hard to be taxed on the 2BTC profit when in reality, you lost 1 BTC.
7

@Petur_Koinly In Australia you can use transaction fees as expenses thus making our final figures incorrect for tax time. I just paid a shit tone more tax than I needed to. Better off paying an accountant to go through the blockchain for me and do the calculations instead.