1 Topic by tom (edited by tom 02/05/2025 12:31:28 am)

  • tom
  • Senior Member
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  • From: USA, FL, Tampa
  • Registered: 03/24/2009
  • Posts: 357

Topic: Crypto Support in FA

I have done some experimentation and have figured out how to properly handle Crypto and maintain Cost basis and compute Capital Gains FIFO,
the general technique should work for other methods, but I want to keep it simple at first.

I have found it is not hard to add a new mb_flag type and existing options to prohibit buying or selling the item and then
we can add Crypto Buy and Crypto Sell in the banking section (Like Payments and Deposits)

I started looking at the webpages to add that functionality and support edit/delete etc as FA does so well and that is a bit of a push for me!

So what I want to do is implement it as part of a new or existing extension and once I have that working find someone to do the FA pages.

*** HELP WANTED *** (Read above first)

Once I get the crypto transaction import working I need someone, either an FA core programmer or someone else who has the skills.

I might be able to put up some money for the project but first and foremost the end product will be open source and available to be merged
into the main FA source.

I have been using FA for 15 years for free (and making contributions) and feel it is important to continue doing so.

If we get a few of us to work on it together we can work on a forked version.

If some who want this can contribute $25, $50, etc that can help - I work for free because I want to use the feature.

If you have something that does a lot of what I am asking for Great, but I am not interested in closed source.

Tom

tom's Website

  • From: USA, CA, Valencia
  • Registered: 12/31/2017
  • Posts: 88

Re: Crypto Support in FA

FA should be able to track it as inventory as is I would imagine
Create the inventory locations for each a location needed
- Bitcoin wallet one
- Bitcoin wallet two
- Bitcoin lightning wallet
- Coinbase exchange
Create assets needed under items
- Bitcoin
- US Tether
Use default accounts or create accounts for crypto for better control proper treatment per US GAAP
Inventory -> Digital Assets
Variance -> Gains/Loss Digital assets
Sales -> Sales
COGS -> COGS

Add supplier and track purchases
-Coinbase
-kraken
Add client to track sales
-Coinbase

It will calc your gains or losses for you
With the new US GAAP rules you can mark to market on your balance sheet. Prior it was only record impairments.

I think you adjust with the cost update or just do a general ledger
Debit - digital assets
Credit - gains / losses
Or vice versa

Do you need the import for prior transactions?
Csv? What headings?

  • tom
  • Senior Member
  • Offline
  • From: USA, FL, Tampa
  • Registered: 03/24/2009
  • Posts: 357

Re: Crypto Support in FA

When tracking the cost and capital gains the coins need to be handled FIFO (I think now there are other allow means), but each sale is tracked back to the cost when purchased, but FA seems to adjust  the cost to an average.

Also the cost basis is also wallet (location) specific, not sure you can use one Inventory account for all...

tom's Website

  • From: USA, CA, Valencia
  • Registered: 12/31/2017
  • Posts: 88

Re: Crypto Support in FA

This would be weighted average.  There are 3 that I know of FIFO, LIFO, and HIFO. The Cost Basis is your average of all purchases.

Note the IRS changes in inventory now is by wallet. So simplify your setup pick a standard and stick to it. Also I saw in 2026 FIFO will be required.

‘Per wallet’ method
After January 1, 2025, all US taxpayers will be required to use the ‘per wallet’ or ‘per account’ cost basis method. This means that sales of assets have to be matched with cost basis from buys or acquisitions of assets from the same account or wallet, hence ‘per wallet’.

The only way I can think without a mod FIFO could be tracked in FrontAccounting is as a foreign currency account then It would have allocations. but im not sure how it would work.

I will pull the inventory tables in a bit for you if you haven't already