Koinly Final Tax Report (U.S.) Showing Fees for Transfer as Sell

[kw917]

Hi,

The final tax report (U.S.) is showing assets that I didn’t sell (at least not from my perspective) as being sold. The dates in the ‘Date sold’ column matches the date that I transferred the asset from one exchange/wallet to another.

The screenshot below is the “TurboTax Online” Koinly report but the same will show on the Schedule D / Form 8949.

Is this normal? The fees seem to be calculated correctly but the exact amount that I paid as the fee for the transfer is what is showing up as the sold amount. For example, to transfer VRA from Kucoin to VeraWallet, the fee was 700 VRA. And that is exactly what the final tax report is generating for the amount sold.

Maybe this is expected behavior. Curious to hear your thoughts and thank you in advance.

[Mark_DesLauriers]

When you pay a transfer fee you are “selling” the amount of crypto that you used to pay the fee. Any time you pay a fee with crypto you are disposing of or “selling” the crypto so you should see a capital gain or capital loss in your Koinly reports. Not sure if this addresses your issue.

[Dieter_G]

By default, Koinly treats the transfer fee (not the transfer itself) as a disposal, upon which a gain or loss may have been incurred. From my limited understanding of the cryptic state of current crypto tax law, it is analogous to the tax gain or loss that may have been incurred when you buy a cup of coffee with crypto. You can override this default behavior in Koinly settings: