On Fri, May 07, 2021 at 12:44:07PM -0700, Anatoly Makarevich wrote:
> Thanks for the link, I had missed that during my initial preview phase. I
> decided to just jump right in, and I already feel that it's the right
> choice.
>
> Yes, I was referring to the lot prices. I see how it makes a lot of sense
> for normal stocks and other integer-valued assets.
> However, for fiat currencies and cryptocurrencies, I would expect tracking
> lots to be a huge headache (it's always fractional).
> Especially since I'm living in a very multi-currency situation even now.
My impression is people don't usually bother with lots for (non-crypto)
currency exchange. I certainly don't. However they may come in handy if
you have to report capital gains on your cryptocurrency.
> *However*, I've found that just having 2 trading accounts (1 for fiat-fiat
> exchange, 1 for crypto-crypto and fiat-crypto exchange) is enough to
> implement the "trading accounts" method.
> For each transaction, you can just specify:
>
> 2021-05-07 * "Self" "Example currency conversion"
> Assets:Cash -100 USD
> Assets:Cash 117 CAD
> Expenses:Exchange:Fiat 4 USD
> Income:Exchange:Fiat
>
> This will automatically track all FX (or crypto) income and fees separately.
> I'm not even certain a plugin needs to be developed, maybe a shortcut for
> "I did an exchange here".
>
> As I understand, the only downside is that all my gains/losses will be
> averaged out, so I can't do creative tax matching.
> However, since any crypto losses can only be weighed against future crypto
> gains (in my location), I don't see this as much of a problem.
I'm not sure trading accounts will give you enough information to file
taxes if you're using cryptocurrencies.
For example, for my US tax, if I spend 0.1 BTC on something, I have to
answer two questions to fill out Schedule D (capital gains):
- How long ago did I buy that 0.1 BTC? Determines whether the gain is
short or long term.
- How much did I pay for it?
I actually haven't tried directly using trading accounts to compute
capital gains, but consider this sequence of transactions:
2020-01-01 * "Buy"
Assets:BTC 0.1 BTC
Assets:Cash -6000 USD
Equity:Exchange -0.1 BTC
Equity:Exchange 6000 USD
2020-02-01 * "Spend"
description: "Buy $7000 gadget for 0.1 BTC."
Assets:BTC -0.1 BTC
Equity:Exchange 0.1 BTC
Equity:Exchange -7000 USD
Expenses:Gadgets 7000 USD
2020-02-01 * "Buy more"
Assets:BTC 0.05 BTC
Assets:Cash -1000 USD
Equity:Exchange -0.05 BTC
Equity:Exchange 1000 USD
The final balance in the exchange accounts will be:
-0.05 BTC
0 USD
For US taxes, at least, you'd need to report a $1000 capital gain from
when you spent the 0.1 BTC. I don't see a convenient way to get that
information out of this example ledger. The exchange account balances
certainly don't seem useful.
--
James
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