Merge pull request #99 from casesandberg/feature/finance-fixes

Fix Realized Gains Calculation

packages/finance/lib/helpers.test.ts

@@ -1,6 +1,9 @@
 import Decimal from 'decimal.js'
 import { mockBalance } from '@play-money/database/mocks'
-import { calculateBalanceSubtotals, marketOptionBalancesToProbabilities } from './helpers'
+import * as ECONOMY from '@play-money/finance/economy'
+import { calculateBalanceSubtotals, calculateRealizedGainsTax, marketOptionBalancesToProbabilities } from './helpers'
+
+Object.defineProperty(ECONOMY, 'REALIZED_GAINS_TAX', { value: 0.05 })
 
 describe('calculateBalanceSubtotals', () => {
   const mockTx = {
@@ -116,3 +119,23 @@ describe('marketOptionBalancesToProbabilities', () => {
     expect(result).toEqual({})
   })
 })
+
+describe('calculateRealizedGainsTax', () => {
+  it('should calculate tax correctly for a gain', () => {
+    const cost = new Decimal(100)
+    const salePrice = new Decimal(150)
+
+    const result = calculateRealizedGainsTax({ cost, salePrice })
+
+    expect(result).toEqual(new Decimal(2.5))
+  })
+
+  it('should not apply tax for a loss', () => {
+    const cost = new Decimal(150)
+    const salePrice = new Decimal(100)
+
+    const result = calculateRealizedGainsTax({ cost, salePrice })
+
+    expect(result).toEqual(new Decimal(0))
+  })
+})

packages/finance/lib/helpers.ts

@@ -2,6 +2,7 @@ import Decimal from 'decimal.js'
 import { TransactionClient } from '@play-money/database'
 import { AssetTypeType } from '@play-money/database/zod/inputTypeSchemas/AssetTypeSchema'
 import { calculateProbability } from '../amms/maniswap-v1.1'
+import { REALIZED_GAINS_TAX } from '../economy'
 import { TransactionEntryInput } from '../types'
 import { NetBalance, NetBalanceAsNumbers } from './getBalances'
 
@@ -117,3 +118,13 @@ export function marketOptionBalancesToProbabilities(balances: Array<NetBalance |
     {} as Record<string, number>
   )
 }
+
+export function calculateRealizedGainsTax({ cost, salePrice }: { cost: Decimal; salePrice: Decimal }) {
+  const gainOrLoss = salePrice.sub(cost)
+
+  if (gainOrLoss.isNegative()) {
+    return new Decimal(0) // Assuming no tax is applied for a loss scenario
+  }
+
+  return gainOrLoss.times(REALIZED_GAINS_TAX).toDecimalPlaces(4)
+}

packages/markets/components/MarketBalanceBreakdown.tsx

@@ -3,6 +3,7 @@ import React from 'react'
 import { MarketOption } from '@play-money/database'
 import { CurrencyDisplay } from '@play-money/finance/components/CurrencyDisplay'
 import { MarketOptionPositionAsNumbers, NetBalanceAsNumbers } from '@play-money/finance/lib/getBalances'
+import { Tooltip, TooltipContent, TooltipTrigger } from '@play-money/ui/tooltip'
 
 const transactionLabels: Record<string, string> = {
   TRADE_BUY: 'Bought positions',
@@ -61,16 +62,32 @@ export function MarketBalanceBreakdown({
             const changeLabel = `(${change > 0 ? '+' : ''}${change}%)`
 
             return value.toNumber() ? (
-              <div key={position.optionId} className="flex justify-between text-xs text-muted-foreground">
-                <div className="flex items-center gap-1">
-                  <div className="size-2 rounded-md" style={{ backgroundColor: option.color }} />
-                  <span className="font-mono">{option.name}</span>
-                </div>
-                <div className="flex gap-2">
-                  {change ? <span className={change > 0 ? 'text-lime-500' : 'text-red-400'}>{changeLabel}</span> : null}
-                  <CurrencyDisplay value={position.value} />
-                </div>
-              </div>
+              <Tooltip key={position.optionId}>
+                <TooltipTrigger className="flex w-full justify-between text-xs text-muted-foreground">
+                  <div className="flex items-center gap-1">
+                    <div className="size-2 rounded-md" style={{ backgroundColor: option.color }} />
+                    <span className="font-mono">{option.name}</span>
+                  </div>
+                  <div className="flex gap-2">
+                    {change ? (
+                      <span className={change > 0 ? 'text-lime-500' : 'text-red-400'}>{changeLabel}</span>
+                    ) : null}
+                    <CurrencyDisplay value={position.value} />
+                  </div>
+                </TooltipTrigger>
+                <TooltipContent className="max-w-sm" align="start">
+                  <div className="line-clamp-2">{option.name}</div>
+                  <div className="text-xs text-muted-foreground">
+                    Cost: {new Decimal(position.cost).toDecimalPlaces(4).toString()}
+                  </div>
+                  <div className="text-xs text-muted-foreground">
+                    Quantity: {new Decimal(position.quantity).toDecimalPlaces(4).toString()}
+                  </div>
+                  <div className="text-xs text-muted-foreground">
+                    Value: {new Decimal(position.value).toDecimalPlaces(4).toString()}
+                  </div>
+                </TooltipContent>
+              </Tooltip>
             ) : null
           })}
 

packages/markets/lib/createMarketResolveWinTransactions.ts

@@ -1,8 +1,7 @@
-import Decimal from 'decimal.js'
 import db, { Transaction } from '@play-money/database'
-import { REALIZED_GAINS_TAX } from '@play-money/finance/economy'
 import { executeTransaction } from '@play-money/finance/lib/executeTransaction'
 import { getHouseAccount } from '@play-money/finance/lib/getHouseAccount'
+import { calculateRealizedGainsTax } from '@play-money/finance/lib/helpers'
 import { getMarket } from './getMarket'
 import { getMarketAmmAccount } from './getMarketAmmAccount'
 import { getMarketClearingAccount } from './getMarketClearingAccount'
@@ -34,11 +33,7 @@ export async function createMarketResolveWinTransactions({
 
   // Transfer winning shares back to the AMM and convert to primary currency
   for (const position of winningPositions) {
-    const taxedValue = position.quantity.sub(position.quantity.times(REALIZED_GAINS_TAX))
-    const valueTaxedIfGains = taxedValue.gt(position.cost) ? taxedValue : position.quantity
-
-    const amountTaxed = position.quantity.sub(valueTaxedIfGains)
-    const isTaxed = amountTaxed.toDecimalPlaces(4).gt(0)
+    const tax = calculateRealizedGainsTax({ cost: position.cost, salePrice: position.quantity })
 
     const entries = [
       {
@@ -64,13 +59,13 @@ export async function createMarketResolveWinTransactions({
         toAccountId: position.accountId,
         assetType: 'CURRENCY',
         assetId: 'PRIMARY',
-        amount: isTaxed ? valueTaxedIfGains : position.quantity,
+        amount: tax.gt(0) ? position.quantity.sub(tax) : position.quantity,
       } as const,
     ]
 
-    if (isTaxed) {
+    if (tax.gt(0)) {
       entries.push({
-        amount: amountTaxed,
+        amount: tax,
         assetType: 'CURRENCY',
         assetId: 'PRIMARY',
         fromAccountId: clearingAccount.id,

packages/markets/lib/executeTrade.ts

@@ -1,8 +1,8 @@
 import Decimal from 'decimal.js'
 import { trade, quote } from '@play-money/finance/amms/maniswap-v1.1'
-import { REALIZED_GAINS_TAX } from '@play-money/finance/economy'
 import { getBalance, getMarketBalances } from '@play-money/finance/lib/getBalances'
 import { getHouseAccount } from '@play-money/finance/lib/getHouseAccount'
+import { calculateRealizedGainsTax } from '@play-money/finance/lib/helpers'
 import { TransactionEntryInput } from '@play-money/finance/types'
 import { getMarketOptionPosition } from '@play-money/users/lib/getMarketOptionPosition'
 import { getMarketAmmAccount } from './getMarketAmmAccount'
@@ -125,11 +125,7 @@ export async function executeTrade({
       throw new Error('User does not have position in market')
     }
 
-    const taxedValue = receivedShares.sub(receivedShares.times(REALIZED_GAINS_TAX))
-    const valueTaxedIfGains = taxedValue.gt(position.cost) ? taxedValue : receivedShares
-
-    const amountTaxed = receivedShares.sub(valueTaxedIfGains)
-    const isTaxed = amountTaxed.toDecimalPlaces(4).gt(0)
+    const tax = calculateRealizedGainsTax({ cost: position.cost, salePrice: receivedShares })
 
     entries.push(
       ...ammAssetBalances.map((balance) => {
@@ -142,17 +138,17 @@ export async function executeTrade({
         } as const
       }),
       {
-        amount: isTaxed ? valueTaxedIfGains : receivedShares,
+        amount: tax.gt(0) ? receivedShares.sub(tax) : receivedShares,
         assetType: 'CURRENCY',
         assetId: 'PRIMARY',
         fromAccountId: clearingAccount.id,
         toAccountId: accountId,
       }
     )
 
-    if (isTaxed) {
+    if (tax.gt(0)) {
       entries.push({
-        amount: amountTaxed,
+        amount: tax,
         assetType: 'CURRENCY',
         assetId: 'PRIMARY',
         fromAccountId: clearingAccount.id,

packages/markets/lib/getMarketQuote.ts

@@ -1,7 +1,7 @@
 import Decimal from 'decimal.js'
 import { quote } from '@play-money/finance/amms/maniswap-v1.1'
-import { REALIZED_GAINS_TAX } from '@play-money/finance/economy'
 import { getMarketBalances } from '@play-money/finance/lib/getBalances'
+import { calculateRealizedGainsTax } from '@play-money/finance/lib/helpers'
 import { getMarketAmmAccount } from './getMarketAmmAccount'
 
 export async function getMarketQuote({
@@ -30,12 +30,10 @@ export async function getMarketQuote({
     shares: optionsShares,
   })
 
-  if (REALIZED_GAINS_TAX) {
-    shares = shares.sub(shares.times(REALIZED_GAINS_TAX))
-  }
+  const tax = calculateRealizedGainsTax({ cost: amount, salePrice: shares })
 
   return {
     probability,
-    shares,
+    shares: shares.sub(tax),
   }
 }

packages/markets/lib/updateMarketPositionValues.test.ts

@@ -3,7 +3,7 @@ import { TransactionClient } from '@play-money/database'
 import { mockAccount, mockBalance, mockMarketOptionPosition } from '@play-money/database/mocks'
 import * as ECONOMY from '@play-money/finance/economy'
 import { getMarketBalances } from '@play-money/finance/lib/getBalances'
-import { BalanceChange, findBalanceChange } from '@play-money/finance/lib/helpers'
+import { BalanceChange, calculateRealizedGainsTax, findBalanceChange } from '@play-money/finance/lib/helpers'
 import { getMarketAmmAccount } from './getMarketAmmAccount'
 import { updateMarketPositionValues } from './updateMarketPositionValues'
 
@@ -50,6 +50,9 @@ describe('updateMarketPositionValues', () => {
     ] as Array<BalanceChange>
 
     jest.mocked(getMarketAmmAccount).mockResolvedValue(mockAccount({ id: mockAmmAccountId }))
+    jest.mocked(calculateRealizedGainsTax).mockImplementation(() => {
+      return new Decimal(0)
+    })
 
     jest.mocked(getMarketBalances).mockResolvedValue([
       mockBalance({

packages/markets/lib/updateMarketPositionValues.ts

@@ -1,9 +1,8 @@
 import Decimal from 'decimal.js'
 import { TransactionClient } from '@play-money/database'
 import { quote } from '@play-money/finance/amms/maniswap-v1.1'
-import { REALIZED_GAINS_TAX } from '@play-money/finance/economy'
 import { getMarketBalances } from '@play-money/finance/lib/getBalances'
-import { BalanceChange, findBalanceChange } from '@play-money/finance/lib/helpers'
+import { BalanceChange, calculateRealizedGainsTax, findBalanceChange } from '@play-money/finance/lib/helpers'
 import { getMarketAmmAccount } from './getMarketAmmAccount'
 
 export async function updateMarketPositionValues({
@@ -49,13 +48,12 @@ export async function updateMarketPositionValues({
         return
       }
 
-      const taxedValue = newValue.shares.sub(newValue.shares.times(REALIZED_GAINS_TAX))
-      const valueTaxedIfGains = taxedValue.gt(position.cost) ? taxedValue : newValue.shares
+      const tax = calculateRealizedGainsTax({ cost: position.cost, salePrice: newValue.shares })
 
       return tx.marketOptionPosition.update({
         where: { id: position.id },
         data: {
-          value: valueTaxedIfGains,
+          value: new Decimal(newValue.shares).sub(tax),
         },
       })
     })