The Profit and Loss feature is a tool for informational purposes only. It is not tax advice, a tax report, or a complete record of your tax obligations. Figures shown are estimates. Consult a qualified tax professional before making any tax-related decisions.
What model does the Profit and Loss feature use to calculate gains and losses?
The Profit and Loss feature uses the Weighted Average Cost (WAC) model. Each time you buy or receive an asset, your average cost per unit is recalculated across all your holdings. When you sell, the tool compares the sale price to your WAC to calculate your estimated realised gain or loss. If you did not complete all buy and sell transactions with Kinesis, your realised gain or loss may not be correct.
Other methods, such as First In First Out (FIFO) or Last In First Out (LIFO), exist and may be required or produce different results from a tax perspective in your region.
How are Kinesis rewards payouts calculated within the Profit and Loss feature?
Rewards are added to your holdings at the market value when received.
The complete list of reward payouts related to this feature includes:
- Yield (Holder’s, KVT, Minter’s, Referral, Velocity, and Partner’s) payments
- Metalback reward payments
- Referral Silver Reward payments
These transactions increase your unit count and are reflected in your cost basis, which updates your weighted average cost (WAC).
In many regions, yields and rewards from digital assets or precious metals are taxable as income in the period you receive them, in some cases, regardless of whether you have sold the underlying asset. Consult a tax professional about the potential for income treatment of rewards.
What about assets I transferred in from another exchange or external wallet?
If you transfer assets into the Kinesis platform from an external wallet or exchange, your cost basis is set at the market price when the asset arrives in your Kinesis account. The Kinesis platform does not know what you may have originally paid for the asset.
For example, if you bought Bitcoin at $20,000 and transferred it when the price was $60,000, your cost basis on Kinesis is recorded as $60,000. The tool will therefore show a smaller gain (or a loss) compared to your actual position.
This is an important limitation to be aware of, and is one reason this tool should not be relied on for tax calculations or filings.
Why does my figure differ from my tax records/filings or another app?
Some common reasons for this may include:
(1) Kinesis’ tool uses WAC; a financial or tax adviser may use FIFO or LIFO, which may produce different results.
(2) Externally deposited assets use fair market value at deposit rather than your original purchase price.
(3) This tool covers your Kinesis activity only - activity on other platforms is not included.
(4) Market price timing differences may cause minor discrepancies.
What if I think a figure is wrong?
If you have reviewed your transaction history and believe there is an error, contact Kinesis Support with the relevant transaction details, and we will investigate.
Please note that this tool is for informational purposes only - Kinesis does not accept liability for financial or tax decisions made on the basis of the figures shown.
If you believe there is an error, contact us 24/7 via live chat support or the Contact Us page with the relevant transaction details, and we will investigate.