There are a few steps you should always take to ensure your tax reports are as accurate as possible. In this article, we will go through the 4 most important steps.
Step 1 - Add all your wallets and transactions
This is the single most important step to ensure accuracy. Coinpanda needs your complete transaction history across all exchanges and wallets to know your cost basis and calculate capital gains correctly. It is therefore important you add all exchanges, wallets, blockchains and apps to Coinpanda.
Step 2 - Verify your balances
After adding all wallets and importing transactions, you should make sure that your balance displayed on Coinpanda actually matches what you have in reality. The simplest way to do this is to summarize all your crypto holdings in a simple Excel or Google sheet, and then compare the amount for each coin with what you see on the Dashboard page.
If there are discrepancies between your balance on Coinpanda and your actual holdings, it means there are transactions that have not been imported. There are several ways you can investigate this, but we recommend to start with the following:
- double check that you have added wallets for all exchanges, blockchains, services and apps where you have transacted crypto
- verify that all transactions have been imported for each wallet. Most exchanges lets you see a complete trade history from their web interface which you can compare with the transactions imported to Coinpanda.
- check if any values from your balance are either way too low or high. Example: if you have transacted with BTC, ETH, XRP, EOS and USDT, and BTC and USDT are the only coins for which your balance does not match, you have narrowed down transactions with BTC-USDT to be the reason.
Note that some exchanges have certain limitations. For example, Binance doesn't allow syncing transactions for delisted coins via API. Some exchanges also limits the trade history from API for last 3-4 months only, such as Huobi and Bibox. In this case, you will need to import CSV files containing the missing trade history to ensure completeness of your transaction history. Read our article Exchange API limitations for more information about this.
Step 3 - Check for any warnings
Coinpanda comes with a built-in tool (Review page) for verifying that there are no transactions or price data missing. On this page, you will see a list of warning trades which might happen because of one of the following reasons:
- you are selling more of coin XYZ than you have in your balance.
Example: if Coinpanda has calculated you have 1.5 BTC in your balance on 15th of October, and you sell 2 BTC the next day, you will see a warning message that there is 0.5 BTC missing in your balance. This tells you that there must be one or more transactions missing prior to this date.
- market rate is missing for coin XYZ
While Coinpanda supports more than 7000 cryptocurrencies, we don't sync market rates for all cryptos on a daily basis (e.g. old coins delisted from exchanges). You will also see this warning message if you have sold a coin before it is listed on sites such as Coinmarketcap or Coingecko. In this case, you will need to manually enter the value/cost for the transaction.
It is important to mention that you are not required to fix all warning trades before you download your tax reports. If you are seeing any warnings, Coinpanda will just assume a cost basis equal to zero for these trades. This can increase your total capital gains, but since it is a conservative approach it is accepted by all tax authorities.
Step 4 - Tag your Receive and Send transactions
It is important to remember that there are special tax rules for coins received from airdrops, forks and mining, or if you have sent crypto as gift, donation or lost access to your wallets.
You should therefore make sure to tag all Receive and Send transactions correctly. For example, if you have received coins from airdrop or staking, this should be reported as income and not as capital gains. Luckily, Coinpanda makes this very easy as you can simply go to the Transactions page, filter for Receive or Send, and check that each transaction is labelled correctly.
Coinpanda will then exclude such transactions from your capital gains, and instead include them in a separate income report which you can download.