Hello.  I'm looking for help understanding how to properly code a loan (to myself using collateral) such that the cost basis is coming up correctly in the US-based tax report.  I thought I was doing it correctly, but after running the tax report...it's basically giving me 0 starting cost basis on proceeds I used the loan for, which obviously is significantly increasing my taxable income more than it should.

I can't find an FAQ article on this (apologies if there is one), so hopefully someone can help.

What I did was first create a new "exchange" for the place where the loan originates (we'll call this Anchor). Say the loan was $1000.

Transfer $1000 from Anchor to Wallet.  This would create a balance of:
-$1000 in Anchor (negative $1000) and a positive $1000 balance in Wallet.  As the negative cancels out the positive, this creates a net of $0.  To me, this works because I want the liability (the loan amount) to be counter to my assets.  Assets - Liabilities = Owner's Equity.

Then, when interest accrues on the loan, I debit Anchor with Interest, increasing the negative (amount I owe back).

Finally, when I want to pay the loan + accumulated interest back, I do the reverse transfer back to Anchor from my wallet, to cancel out the loan.

This does what I want it to in Cointracking but my tax reports are completely screwed up because of it.

How do I code this properly so I don't screw up my tax basis on the "income" I get from the loan (which isn't actually income)?

Thank you in advance.