Transaction Type - Realized Profit & Realized Loss

[topcoderasdf]

Many exchanges with futures trading (Binance, Bybit, FTX, etc), their APIs actually provide realized pnl of futures trading. So it seems like tax services like Koinly just import pnl when computing futures trading taxes. https://help.koinly.io/en/articles/4933122-futures-pnl.

So I think rp2 and Dali-rp2 should also enable in transaction type of realized profit (gain) and out transaction of realized loss (loss). This will make things a lot simpler.

[topcoderasdf]

Formal Spec for Futures Trading

Transaction Types

• Realized Profit ( treated as buy at 0 spot price)
• Realized Loss (treated as sell at 0 spot price)

[topcoderasdf]

Actually I think we will have to spend some time thinking about how to treat realized profit and realized loss.

[eprbell]

I am no futures expert, so I'm just spitballing here. I read a bit about futures, including your link and initially I thought we had a couple of options:

Option 1)

• income: a in-transaction capturing the differential gain of a future contract (with a note explaining it's a future)
• sell: an out-transaction capturing the differential loss of a future contract (with a note explaining it's a future) Futures gains/losses show up in the "Capital Gains" tab of tax_report_us.ods.

Option 2) Same as option 1 but we add 2 new transaction types:

• realized_gain for differential gains (with note)
• realized_loss for differential losses (with note) Futures gains/losses show up in the realized gain / realized loss tabs of tax_report_us.ods.

But then I realized futures transactions don't affect the crypto in/out flow (if I understand them correctly): they are purely fiat gains/losses and your crypto stash remains unaffected. Is this correct?

[topcoderasdf]

But then I realized futures transactions don't affect the crypto in/out flow (if I understand them correctly): they are purely fiat gains/losses and your crypto stash remains unaffected. Is this correct?

I think a lot of futures provide gains in BTC or USDT. If I remember correctly, BitMex provides gains/losses in BTC, while Binance, and Kucoin provide gains/losses in USDT.

In terms of the available options, I personally think option 2 is a better approach as it would be easier to navigate through transactions and identify which is which, especially if you have transactions coming from multiple sources. Also as futures/derivative markets are bigger than spot markets in terms of trading volume, I think futures deserves to receive its own separate identification.

Btw, I just learned that INCOME and GIFT are taxed differently. INCOME gets taxed when one receives, while GIFT gets taxed when one sells. So Option 1 is also a viable approach. I had initially thought that all earn types get taxed when one sells, which led me to mistake that all earn types are unrealized gains. So INCOME is in fact realized gain while GIFT is basically unrealized gain.