Koinly recognises Liquidity in and out transactions, e.g. from uniswap, and labels them as such. “Realize gains on liquidity transactions” is off for me, but for cost basis method Shared Pool / Individuals gains still show. Until koinly resolves this, would use of a pool or manual wallet be a work-around?
e.g. soft delete the liquidity transactions
create a manual transfer into a manual wallet when a token is added to a pool
create a manual transfer out again for the same amount
repeat for both tokens in the pool (assume only 2)
finally add a manual exchange transaction to reduce one token and gain another in whatever quantities match up with what came out
For the UK, fees earnt during the time the liquidity is in the pool are probably income. However, I am not sure it is possible to separate this from loss / gain caused by the changes in ratio of tokens in the pool, which feels like capital gain, like a swapping tokens. Not sure how to deal with that but for now I wonder if the above method is good enough.