Support Most Effective Tax Method

Feature Requests
#1

With your Tax methods you support FIFO, HIFO, LIFO and ACM. All of these tax methods have their pros and cons, but depending if your Capital gains tax is a loss or a gain, they can all have their disadvantages.

Professional tax software usually allows you to select the transaction you want to use as a parcel, for the buy, so that you can have the “Most effective tax method”.

I.E If you have a capital gains, you want to select the coin that has the highest cost basis.
IF you have a capital loss, you want to select the coins that has the lowest cost basis.

If your software could allow you to select this at the transaction level well you sell , or auto matched it if you selected it. That would be amazing.

Kind Regards

#2

PLEASE add the ability to change the method on a per sales event level.

2 Likes
#3

Any thoughts on this Koinly? It would be a great feature to be able to support, and would save your customers a lot at tax time.

#4

I would suggest to do it like many large brokers do for stocks. They have a Tax Lot Optimizer that picks the most optimal lot to sell. It is not very complicated. Schwab, for instance, implements this feature in the following, very well-defined order:

  1. Short-term Losses: Lots reflecting short-term losses are sold first, from greatest short-term loss to least short-term loss.
  2. Long-term Losses: Lots reflecting long-term losses are sold, from greatest long-term loss to least long-term loss.
  3. Short-term, no gains nor losses: Short-term lots that reflect no gain nor loss
  4. Long-term, no gains nor losses: Long-term lots that reflect no gain nor loss
  5. Long-term Gains: Lots reflecting long-term gains from least long-term gain to greatest long-term gain.
  6. Short-term Gains: Lots reflecting short-terms gains from least short-term gain to greatest short-term gain.

Koinly already does most, if not all, of these calculations in the other methods, so it shouldn’t be very difficult or time-intensive to implement this kind of optimization as an additional accounting method option besides the others that already exist. It would truly save A LOT of users A LOT of money and it would really put Koinly (or whoever implements this feature first) ahead of the rest in terms of value the crypto accounting software space.

1 Like