When reviewing transactions, you may find that cost basis on a specific disposal looks wrong. This article explains why this might happen and what to do.
Reasons your cost basis may look incorrect and How to Resolve Them
Cost basis calculations, while complicated for a human, are a pretty straightforward process for a computer. Because of that, the three main reasons for the cost basis calculated by Koinly to be wrong are: Additionally, Koinly’s calculations depend on regional tax regulations. For instance, in Canada, the Average Cost Base (ACB) method is used, while in the United Kingdom, share pooling rules influence calculation outcomes.
1.🟩 Cost basis calculation is correct but based on wrong data (true for most cases)
Data needs to be fixed/adjusted (missing trades, missing tags, etc.)
Fixing the underlying data changes the calculations
2. 🟨 Cost basis calculation is correct, only the expectations were wrong (true for some cases)
Cost basis is derived according to the cost basis method and rules assigned
Those rules may be counterintuitive or result in an unexpected outcome
There is nothing to fix in this scenario - the cost basis is correct
3 🟧 Cost basis calculation is incorrect(extremely rare)
There's an issue in Koinly's cost basis calculation engine that needs to be reported to Koinly Support via our in-app chat If troubleshooting complex cases, you can follow these steps:
Address flagged issues in the 'Review Needed' section of the tax reports page.
For API-syncing wallet errors, delete and re-add wallets while prioritizing file imports over API syncing.
Verify compliance with share pooling or FIFO methods based on regional application.
It's important to first know how cost basis should be calculated to be able to assess if the calculation provided by Koinly is correct. If you want to check/confirm Koinly's calculations Koinly, see:
👉 How to troubleshoot cost basis calculations Additionally, ensure all transactions are fully imported from each wallet. Watch for API sync issues or deleted entries, which may disrupt calculations. Refer to specific guides like the Binance Integration Guide for API-related resolutions.
Region-Specific Calculation Methods
Canada
Koinly calculates cost basis using the Average Cost Base (ACB) method, ensuring consistency across wallets and exchanges. However, this may lead to variations compared to exchange-specific calculations.
United Kingdom
Cost basis calculations follow Share Pooling Rules, reflecting aggregated asset values based on their deposit date to provide precise value tracking.
Universal Tracking and FIFO
Universal Tracking selects the oldest lot across all wallets for a transfer, aligning with global accounting practices.