Problems dealing with total losses & bankruptcy

[gbtorrance]

Hi,

I was unfortunately caught up in the Celsius bankruptcy. I had a basket of tokens on Celsius at the time of bankruptcy in 2022, and received BTC and ETH distributions in exchanges for these tokens in 2024.

The way I wanted to deal with this was to record each token in the initial basket as a total loss (long-term capital loss), and also add "dummy" transactions to "buy" the BTC & ETH for "free" (the allocation from the bankruptcy) and later sell it in 2024 for my actual sell price, resulting in a long-term capital gain to offset the earlier loss. From a tax perspective that should correct (even though it's a bit of a hack).

But I've encountered two problems.

1. I cannot record a BUY or SELL with zero spot price, because I get this error:

ERROR: Fatal exception occurred:
Traceback (most recent call last):
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/rp2_main.py", line 151, in _rp2_main_internal
    input_data: InputData = parse_ods(configuration=configuration, asset=asset, input_file_handle=input_file_handle)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 127, in parse_ods
    _create_and_process_transaction(
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 166, in _create_and_process_transaction
    transaction: AbstractTransaction = _create_transaction(configuration, current_table_type, internal_id, row_values)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 286, in _create_transaction
    transaction = OutTransaction(**argument_pack)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/out_transaction.py", line 63, in __init__
    raise RP2ValueError(f"{self.asset} {type(self).__name__} ({self.timestamp}, id {self.internal_id}): parameter 'spot_price' cannot be 0")
rp2.rp2_error.RP2ValueError: BTC OutTransaction (2023-09-18 16:09:00-04:00, id 572): parameter 'spot_price' cannot be 0

2. I cannot use the LOST transaction type, even though the documentation seems to indicate that it is valid.

From the documentation:

transaction_type: DONATE, FEE, GIFT, LOST (useful to represent lost coins, due to exchange bankruptcy, theft, etc.), SELL or STAKING (useful to represent staking losses, due to node being offline, etc.).

I get the following error:

ERROR: Fatal exception occurred:
Traceback (most recent call last):
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/rp2_main.py", line 151, in _rp2_main_internal
    input_data: InputData = parse_ods(configuration=configuration, asset=asset, input_file_handle=input_file_handle)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 127, in parse_ods
    _create_and_process_transaction(
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 166, in _create_and_process_transaction
    transaction: AbstractTransaction = _create_transaction(configuration, current_table_type, internal_id, row_values)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/ods_parser.py", line 286, in _create_transaction
    transaction = OutTransaction(**argument_pack)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/out_transaction.py", line 45, in __init__
    super().__init__(configuration, timestamp, asset, transaction_type, spot_price, row, unique_id, notes)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/abstract_transaction.py", line 40, in __init__
    self.__transaction_type: TransactionType = TransactionType.type_check_from_string("transaction_type", transaction_type)
  File "/home/greg/.local/lib/python3.10/site-packages/rp2/entry_types.py", line 46, in type_check_from_string
    raise RP2ValueError(f"Parameter '{name}' has invalid transaction type value: {transaction_type}")
rp2.rp2_error.RP2ValueError: Parameter 'transaction_type' has invalid transaction type value: LOST

Is it possible to make spot price == 0 be a warning rather than an error? Seems there are cases where this is reasonable, right?

And shouldn't LOST be valid?

Thanks!

---

BTW, I'm on RP2 1.7.1

[gbtorrance]

For the sells I ended up working around the issue by recording fiat_out_no_fee as 0.000001, which is close enough to zero that the desired effect was achieved. (fiat_out_no_fee also disallows zero values.)

For the buys of BTC and ETH (which I wanted to "buy" for "free" as they were distributed by Celsius) I decided to not record these in RP2 at all. (I could have done something similar to the above, but decided not to.) I will just record these as stand-alone long-term gains for TY2024.

[eprbell]

The correct way to represent this is via the LOST transaction type. The reason it's not recognized is that it was introduced after the latest release, so I need to cut a new release including the latest changes: I'll do that in the weekend. I don't think we should allow transactions with zero spot price, unless there is a compelling reason to do so.

[gbtorrance]

Gotcha. Thanks!

[eprbell]

OK, I cut a new release of RP2 (1.7.2): can you try again?

[gbtorrance]

Hi @eprbell. Sorry for the delayed reply.

I tested, and unfortunately it's not working as expected. Take this example.

All my AAVE on Celsius was lost, so I recorded the following.

I entered a dummy spot_price of $1, since it really shouldn't matter. But I noticed that is being used to calculate non-zero "proceeds". But "proceeds" should be zero in the case of a LOST transaction.