Your 29 Nov release added a global setting Realize gains on liquidity transactions, which I turned off.
I then deleted my wallet that had a liquidity transaction and added it back in.
The Liquidity transactions still show gain/loss. Is this the same issue as with manually marking a transaction as a Swap not working for Shared Pool cost basis? If so, will this also be resolved during December?
The transaction was on uniswap: NMR / UNI-V1
For liquidity I would like to achieve this: no gains when tokens are transferred into the pool, on exit from the pool I would like gains to register on just the difference in token quantity that came out, compared to quantity put in.
Hi, the difference in quantities would be “Income”. Currently the swap tag simply moves your cost-basis into the LP token and then out of it when you remove liquidity. The way this is handled for liquidity is same as for Swap and has the same limitations i.e. share pooling not yet supported. We are working on a way to resolve this.
Thanks for the update. Ok I can see that returns from providing liquidity could be at least in part considered to be income. But on leaving the pool you will be taking out different quantities of each token (assuming a 2 token pool), so isn’t there an exchange involved too? i.e. exchanging the tokens that have decreased in quantity for those that have increased, with associated gain/loss?
Yes, there is a trade involved too. It comes down to what your tax agency views such transactions as. The default treatment for liq. txns on Koinly is same as for any crypto to crypto trade. The new setting simply gives you a choice to treat liquidity tokens more like “pools” if you and your accountant/tax-agency are of the opinion that no taxable trade occurs here.