Hi There,
I have a problem with the TAX report from Koinly:
Although it’s a great (probably the best) tool out there to get all the data into one report, and it seems to be great for investors in Australia,
it is NOT AS GOOD for day traders in Australia.
Reason being:
When you do a trading business in Australia (if it doesn’t fall into investor category basically), you have to put the following items into the tax return:
- income (from sales)
- purchases + other costs
- opening stock (cost)
- closing stock (cost or value)
The problem is, that the Koinly tax report only shows gain/loss for the trades that have been sold. The crypto assets that haven’t been sold are rightly shown in section 4.End of Year Balances, but the report doesn’t even calculate the total for the cost and value columns, so I have to sum it up MANUALLY to get the closing stock. - see attached.
But the opening stock is even bigger problem:
To get the opening stock value, you have to do a tax report for the previous year and take it from the same section 4.End of Year Balances.
Why can’t you include a section called “Start of year Balances”???
Another problem:
To get all the purchases for my tax return, I have to take Acquisition Cost from the Capital Gains Summary and add the manually summed up total from the cost column in section 4.End of Year Balances.
That’s because the purchases are not included in the Capital Gains Summary…
So, the only item I can simply take from your report without extra work is the sales (Proceed from Sales) and Cost.
I don’t get this:
Day traders would want to use your software in the first place, as they have thousands of transactions per year, but your report is more investor friendly (for capital gains tax)…
How does that work?
It’s surely not just Australia…
Or am I doing something wrong?
Here’s a simple explanation of the opennig/closing stock process I found on web:
Think of it as a simple grocery store.
Your opening stock is the value of everything on the shelf at the beginning of the year (assuming all stock is on the shelf).
Your purchases is the cost of everything you buy for the year.
Your sales is the proceeds from everything you sell in that year.
Your closing stock is the value of everything on the shelf at the end of the year.
As you can see, the value of your stock at the beginning of the next year is the value of the closing stock at the end of the previous year,.
So if you had just one product, a 600gm can of Heinz beans that you buy for $1 and sell for $1.20, and you had 6 on the shelf at the beginning of the year, bought 8 more and sold 4 (so you will have 10 at the end of the year), these will be your figures:
Opening Stock $6
Purchases $8
Sales $4.80
Closing Stock $10.
Profit = Sales – (opening stock + purchases – closing stock)
= $4.80 – ($6 + $8 – $10) = $0.80
The following year you realised that you have overstocked and don’t buy any more of that product, but sell 6 during the year. These would be the following years figures:
Opening Stock $10
Purchases $0
Sales $7.20
Closing Stock $4
Profit = Sales – (opening stock + purchases – closing stock)
= $7.20 – ($10 + $0 – $4) = $1.20
Thanks.