Describe the problem:
This year I have giant profits calculated by Koinly. I am pretty sure that it’s not right, as yes, I’ve had sales with high profits. BUT I had clear, lots of severe losses in the second part of the year. When analyzing what the heck is going on, I see that losses are not calculated properly for a slew of transactions.
I have ACB with superficial loss as a setting - as I’m in Canada.
But as you can see here, I didn’t rebuy within 30 days. So why is there no LOSS shown for $160.37, the difference between the values shown??
Here’s one example:
Which exchange/wallet is this regarding?
Any/ all, but the example is from Binance Smart Chain
How did you import data into this wallet?
API
What have you tried to fix this so far?
Nothing - no idea how this can be fixed.
Could Koinly be looking at your Liquidity Out tx on June 19 as a reacquisition of at least some if not all of the 108 MOD you disposed of on May 22 (28 days earlier)? If so, the superficial loss rule might apply. Just a thought.
Having stated the above, it looks like you have enabled Realize gains on liquidity transactions? in your Settings so I don’t understand why the Liquidity In tx on May 22 isn’t showing a gain/loss on at least some of the MOD disposed of. The total MOD acquired in the 2 tx on June 19 is less than the total MOD disposed of in the 2 tx on May 22 so the superficial loss rule doesn’t explain the total absence of any gains/losses on May 22 (assuming there is no other relevant MOD tx that you are not showing us).
Ha, good catch - I think that you’re right about the liquidity out transaction as likely being counted as a (albeit) partial acquisition. I’ll look for other examples.
Wrt the second part - that’s indeed a good point - and no, there are no additional transactions.
Having stated the above, it looks like you have enabled Realize gains on liquidity transactions? in your Settings so I don’t understand why the Liquidity In tx on May 22 isn’t showing a gain/loss on at least some of the MOD disposed of. The total MOD acquired in the 2 tx on June 19 is less than the total MOD disposed of in the 2 tx on May 22 so the superficial loss rule doesn’t explain the total absence of any gains/losses on May 22 (assuming there is no other relevant MOD tx that you are not showing us).
Can someone from Koinly address this concern? Thank you Mark.
Here’s another example, this time not including any liquidity play:
How come that there is a loss for the 5:09AM transaction, but none for the 12:49-2:50AM ones??
@Mark_DesLauriers , since Koinly is not following up, can you please advise if you have seen this sort of issue? I have other examples as well.
Such as:
or
or
Bottom line: commons sense would indicate that if during a year you have huge profits, but that is followed by several crashes/ losses and at the year end you end up with a lower portfolio than at the beginning you should never have to pay taxes on enormous profits.
In my case I have $80k PNL for the capital gains, while for the year I ended up with a $20k portfolio, down from $30k at the beginning of the year.
And I DID trade a lot after those gains - so whatever was gained has been lost mainly by uninspired trading + the bear market conditions. Surely not a case where the gains went into something that was not touched - hodl or staking.
How can this happen? The above is an explanation to me. I should have a myriad of smaller losses that would offset some (legitimate) high gains from last year.
Hello!
Alex from Koinly here 
It definitely does look like the superficial loss is coming into play here.
Did you check all your wallets for transactions with those currencies and on those dates?
Koinly will consider a reacquisition in a different wallet as well.
If that doesn’t seem to be the case, then could you please send us an email at hello@koinly.io so we can take a closer look?
Best regards,
Alex
Thanks for following up Alexander.
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Wrt the BTC/UTK transactions in the last screenshot from Sep 20th: I must say that I don’t understand how SL will kick in for the first two transactions, but not for the latter two??
I am emailing you yet another example, where I am also showing the cost analysis - which is really not adding up.
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I have asked this before, with no response from Koinly - is it possible to have gone through losses most of the year and for most of them to NOT be recorded/ recognized by Koinly? Is it possible for SL or any other ACB related rules to cancel out most of the losses? The end result of this would be that the profits would not be offset by the loss amounts, which is my case. I did reinvest and traded the gains from the beginning of the year - several times.
A quick update.
At a high level, the issue was indeed due to SL.
I’ve recalculated w/o SL and the losses have shown up.
But the overall impact on the PNL has in the end been quite low, as the cost basis have changed as well.
Capital gains calculation seems to be the main culprit. I still don’t understand how losses don’t offset profits, when you end up with a much lower portfolio at the end of the year.
ALSO, this still does not explain how SOME transactions minutes apart, for the same pair end up having a profit/loss calculation, but others don’t. This is likely wrong.
Conclusion: these issues have “helped” me decide to file everything as business income (possibly with the exception of NFT’s).
Cheers
