I tested out a few of the withdraw classifications. I did an “add funds” deposit of 1,000 MATIC and then removed the 1,000 MATIC a minute later using the classifications: “fee”, “interest paid”, “margin fee”, “lost” and “remove funds”. These are the only MATIC transactions in my wallet, and I used the “amount” section and not the “fee” section to remove the funds.
I found that only the classification of “margin fee” for the above mentioned classifications triggers 0 proceeds, and an X amount for cost basis, valued at 1,000 MATIC at the time. Thus for this classification I actually have 1,000 MATIC worth of short term losses.
“Fee”, “interest paid” and “lost” all have a proceeds value equal to the cost basis associated with them. Thus for these classifications I have a 0 gain/loss. This seems inaccurate, as these classifications (at least the “fee” one, not 100% sure about others) should not have a proceeds associated with them. But please let me know if I’m wrong.
Finally, if I put the 1,000 MATIC withdraw in the “fee” details section, it triggers 0 proceeds correctly. No matter the classification.
A second issue is with the deposit classifications. I already messaged Matt privately about this issue but I’ll state it here again. None of the deposit income classifications trigger any proceeds. So, taking MATIC again as example: if I deposit 1,000 MATIC and classify it as “income”, “staking income”, or any other, it does not add to short term gains. So is income not taxed on Accointing? That does not sound right to me. Again, please let me know if I’m missing something crucial here. This is for USA taxes by the way.
Thank you for your time!
That doesn’t really answer my question, but I look forward to “tax guy”'s answer as you mentioned to me privately
Okay, so we have looked into your question? I was sure that in the 2nd link, I posted you would have answered your question. You can select your country (USA) and that should answer your questions.
So let me see if I understand your questions correctly.
- Which withdrawal classifications trigger proceeds?
- Which deposit classifications trigger proceeds?
Reading up a bit more I understand the income part better, but I still have some questions about fees:
- What is the difference between using the “fee” section for a fee, and using the “amount” section and classifying the outgoing transaction as fee?
- Are internal transaction fees in the “fee” section treated the same as trading fees (such as swap fees) in the “fee” section?
- Are outgoing transaction classification types such as fees, interest paid and gambling deduced from the “tax relevant income” section in the full tax report?
Hey guys, so for the fee issue, a fee in our system is actually a separate transaction in our software.
So let’s say you want to send 100 BTC to another wallet and it has a fee of 1 BTC to send.
The correct way to add this into our system would be the following:
Transfer 99 BTC with a fee of 1 BTC
Balance Change = 100
A common issue is that users think that the fee is subtracted from the amount and will get this issue:
(This is just a hypothetical example with easy math to make it easier to understand.)
We are in the middle of restructuring our fee system so maybe I should answer your specific questions after that?
Looking at my second point from my last post, I noticed internal transaction fees seem to be just treated as “remove funds”, and therefore do not result in a loss like trading fees do. Why is this? Please take a look at how your competitor Koinly does it, and scroll down to the transfer fees section:
Can you guys implement this? Or at least have the option to make sure internal transfer fees add to cost basis? This can be a large tax saver for a lot of people, in my own case more than this software costs. This would make it an easy decision for people with high transfer fees to use a different software.
We plan to change up how we do fees soon.