How to Manually Enter Loan and Liquidation Transactions in CoinTracker

Overview

In some cases, users may need to manually enter loan and liquidation transactions in CoinTracker, particularly when dealing with self-custody wallets and crypto-collateralized loans. This guide will walk you through the process of entering and modifying these transactions to ensure they are accurately represented in your CoinTracker account.

Manually Editing Collateral Sent Transactions

When you send collateral for a loan, you're intending to get that crypto back rather than actually disposing it at that time, so you can mark that transaction as a transfer. Hover your mouse on the right side of the transaction row and choose "change type to transfer". When you need to represent collateral being returned to you, that transaction can also be marked as a transfer. Using the transfer type removes the gain/loss calculation.

By default, marking the transaction as a transfer will show your collateral going to and returning from "Other transactions". This is OK if you only interacted with one vault for this type of activity, but if you've had more than one loan you may want to create a separate wallet to represent each vault you've interacted with. Then just make sure that you're sending collateral to and from that wallet when you use the transfer type, instead of letting it default to "other transactions".

Creating A Separate Wallet to Represent Loan Vaults

This is optional. You can create a new wallet by importing a CSV with a placeholder transaction. It should be formatted like this:

Additional instructions for formatting a CSV to the correct format to create this wallet can be found here: Converting and importing transaction history CSVs with the CoinTracker CSV format

The CSV won't add any new transactions; it just has one placeholder row that won't be imported. It will simply create an empty wallet in your CoinTracker account to help identify the transactions if needed. To create an imported wallet with the CSV:

1. Navigate to Wallets > Add Wallet.

2. Type “Import” into the search and select “Import from CSV”.

3. For the wallet name, type in something that will easily identify which vault or location this represents.

Loan Liquidation

If you had collateral that was liquidated while in the vault, we don't currently represent that kind of activity with a transaction for most platforms, but you can add it manually.

To represent a full or partial liquidation, you can create a manual transaction that just shows a "send" for the amount liquidated, and you'll see the loss calculation on that transaction. The date of the transaction should be the date the liquidation happened. Make sure you set the sending wallet to the correct "vault" if you've created those using the spreadsheet I attached.

Loan Funds Received

Please be aware that manual transactions don't currently affect balances in the same way that automatically synced transactions do, so you may not see the balance reduced if you're making a manual transaction to send collateral out, for example. For transactions where you receive loan funds or pay back a loan, those transactions can be set with "Ignore" by clicking "ignore transaction" in the menu as seen in the screenshot above. Please see this article for more information about crypto-collateralized loans.

Fees

Please note that there may be additional fees associated with crypto-collateralized loan activity. Any fees that are not already represented on your transactions can be added as manual "send" transactions to reflect these additional disposals of crypto.

Example Loan Liquidation Scenario

For the purpose of this guide, we'll use the following example:

1. A user sends 10 ETH to a vault as collateral.
2. Crypto prices drop, and 6 ETH is liquidated, resulting in a complete loss of that amount for the user.
3. The user receives back the remaining 4 ETH that was not liquidated.

Step 1: Create a Wallet Representing the Vault

First, the user created a new wallet to represent the vault where you've sent your crypto and imported it to CoinTracker.

Step 2: Send Transaction to the Vault

Next, find the sent the 10 wstETH to the vault. If this transaction appears automatically as a taxable "send," mark it as a transfer and change the receiving wallet to the appropriate vault. If this transaction is not in CoinTracker, it will need to be added manually.

Step 3: Receive Transaction from the Vault

Find or create the transaction where they received the remaining 4 wstETH from the vault. This should also be marked as a transfer, and the sending wallet should be set to the appropriate vault.

Step 4: Account for the Liquidated Crypto

Finally, they'll need to account for the 6 wstETH that was liquidated and did not come back to them. They'll create a new transaction representing the disposal of the liquidated amount. The date of this transaction should be the actual date of the liquidation. This is the only transaction in this sequence that will have a gain/loss calculation.

Notes

• Due to a known bug with defi transactions in self-custody wallets, you may see an error on the send transaction created to dispose of the liquidated amount. This error is erroneous and does not indicate a problem, but you should double-check the capital gains CSV. The gain/loss calculation should still appear on your downloaded forms.
• This example does not include any fees, penalties, or other charges you might encounter. You may need to add these manually to your transactions.
• If you have to recreate transactions that were automatically synced, don't forget to set "Ignore" on the automatically synced ones to avoid duplicates.