I am currently tagging crypto burns as a lost transaction. Is that what I should be doing or is it a cost? What is the difference between the two as it relates to tax?
Hi, Koinly doesnt realize any gains on Lost transactions, these will also appear in a separate report that you can use if you want to claim back any losses. A cost will realize a gain and will also appear in your tax report under Costs expenses
It’s not a realized p&l. The choice between cost and lost depends on why you are making that transaction, difficult to answer without knowing the context. The difference between the 2 tags is that a Cost will realize a gain while a Lost tag will not.
You did not answer my question. Should this transaction be tagged as “cost”, “realized P&L” or “lost”? And what is the difference from a tax reporting perspective?