When reviewing your tax summary on the "Tax Reports" page, you may notice that the total calculated capital gains is wrong/implausible.
Gains reporting discrepancies can manifest as mismatched unrealised losses, incorrect profit and loss figures, or misaligned tax form outputs. These issues generally arise from data import errors, account limitations, or incomplete transaction entries. Additional examples include impacts from regional tax rules like share pooling (specific to UK regulations) and misunderstanding of superficial loss rules in jurisdictions such as Canada.
Common causes of discrepancies include unrealised losses due to data import errors, exceeding your plan's transaction limit, and incomplete or incorrect transaction data in your uploaded files. Ensure all wallets, including hardware wallets, are imported to Koinly. Misclassified transfers, such as transfers between wallets being marked as taxable events, can also lead to reporting errors.
Koinly's cost basis calculation engine determines your total capital gains based on:
Transactions imported
Settings selected
While resource-intensive, those calculations are quite straight-forward for a machine to compute so if the calculations seem wrong, it means one of the above is wrong.
If your current Koinly plan exceeds its transaction limit, calculations in your account will stop and result in implausible figures. To resolve this, either upgrade your Koinly plan to allow for a higher transaction volume or reduce the number of transactions by deleting unnecessary entries to stay within your plan's limits. Additionally, deleting duplicate or redundant wallets can affect your capital gains calculations. Ensure data is consolidated properly before generating reports.
To prevent reporting issues: regularly sync your accounts to Koinly to ensure all transactions are included, double-check imported data for missing or duplicated transactions, and upgrade your plan before reaching the transaction limit to avoid disruption in calculations.
1️⃣ Check your transactions
Follow the article below to check your imported data for correctness/completeness:
2️⃣ Review your settings
Koinly's calculation may be mathematically correct, but not correct for you - rules that Koinly should follow depend on the tax regulations in your Country and possibly on additional factors as well (e.g. individual vs business).
Missing or incorrect data in your uploaded files can lead to discrepancies such as losses appearing as negative holdings or mismatched figures in reports. Ensure all transaction data, including deposits, withdrawals, and trades, is complete before generating reports. You can use the Cost Analysis tab in Koinly to cross-check and understand the relationship between your transactions and tax forms.
Check the article below for an overview of what you need to know in order to properly assess Koinly's calculations:
3️⃣ Consider Regional Tax Methodologies
Share Pooling and Superficial Loss Rules
Regional tax laws can significantly impact your capital gains calculations:
Share Pooling Methodology (UK): This approach consolidates your holdings to calculate gains more comprehensively. Ensure your reports align with these principles.
The Superficial Loss Rule (Canada): Adjusts your cost basis when purchasing the same or similar assets after a sale, often causing unexpected discrepancies.