Looks like all koinly capital gains and loss imports ( referring to the turbo tax online file created by koinly ) to turbo tax creates a separate 8959 with box c checked - short term/long term transactions not reported to u on 1099-B.
This is ok for defi transactions as 1099-B never get sent out for them anyways but it becomes a problem in case the exchanges like kraken, coinbase etc reports 1099-b sales to irs and we import these exchanges data into koinly . In this scenario koinly/turbo tax will falsely tag all of these in 8959 as option ‘c’ ( short term/long term transactions not reported to u on 1099-B. ) as koinly/turbo tax imports is not able to differentiate between form 8959 a, b or c to be checked as it always tags all transactions as option c .
So in net - will that be an issue with tax filing ? or should we just discard the 1099-b send by exchanges to irs as their cost basis reported in 1099-b would be messed up anyways in case of token transfers across exchanges /wallets as the exchanges would always have a zero cost basis for the tokens received on their end in which case which is WRONG . If we go the koinly route we would be able to correctly capture the cost basis for all token transers and subsequent sell transactions .
What do u guys think ? Thoughts ?