LocalBitcoins has announced it's shutting down. In a statement released on February 9, 2023, the company said customers should withdraw their funds from their LocalBitcoins wallets in the next 12 months.
To get started, simply connect Koinly to LocalBitcoins via an API integration or CSV file upload. Once connected, Koinly imports all your LocalBitcoins trades automatically. Next, Koinly calculates all your gains, income and expenses with easy-to-spot totals ready for your tax return. At tax time, simply download the Koinly tax report for your country and you’re good to file!
Good to Know: The import may take a few minutes. That is normal. Once Koinly and LocalBitcoins is connected you may notice a yellow circle next to the LocalBitcoins icon in your Koinly Wallet. Why? Koinly has calculated your balances based on the imported transactions but the balances reported by the API are not quite matching up. Don’t worry, this is easy to fix! See our support article here.
We recommend checking through your imported transactions on Koinly to see if everything is imported, and that your transactions are correctly labelled.
Koinly’s crypto tax software is smart, but incorrectly imported data can cause issues.
Checking your transactions and correcting any inaccuracies lets Koinly calculate and generate the most accurate tax reports for you.
There are a few simple steps you can follow to make sure your tax report is accurate:
Start by making sure all your wallets and exchange accounts are synced with Koinly. This lets Koinly identify which transactions are transfers and which are deposits or withdrawals.
Now, head to your transactions page in Koinly and take a little time to ensure they're all correct. You can filter by the type of transaction as well as by the amount to identify and amend any transactions that you believe to be incorrect. For example, large withdrawals or deposits that are actually transfers between wallets is an easy fix.
Finally, review the labels on your transactions. Koinly will normally do this automatically, but there are some instances when transactions like rewards or mining income aren't marked in the imported data. It's always good to double check your transactions and use any of the following labels.
Withdrawals refer to sending coins, tokens and funds. Koinly sees these as a disposal of an asset, which makes the transaction subject to Capital Gains Tax in most countries. But, some withdrawals are tax free and you should label these using withdrawal tags.
Deposits refer to receiving new coins. Koinly sees deposits as a purchase at market price or an investment. They can be subject to Income Tax or Capital Gains Tax, depending on your location and the type of deposit. Check the labels to make sure the right tax is applied.
Trading crypto for crypto, buying crypto with fiat and selling crypto for fiat are exchanges. Trades are sometimes taxed (depending on where you live), buys are never taxed and sells are always taxed. Koinly calculates all this on your behalf, so there's only one exchange tag you may need.