How can I accurately determine the cost basis of my digital currency holdings?

3 answers

• Olga HernandezApr 09, 2022 · 3 years ago
  Determining the cost basis of your digital currency holdings is important for tax purposes and tracking your investment performance. To accurately calculate your cost basis, you need to keep track of the date and price at which you acquired each digital currency. This information can be obtained from your trading history on the exchange platform you use. You can also use cryptocurrency portfolio tracking tools that automatically calculate your cost basis based on your transaction history. By accurately determining your cost basis, you can ensure that you report your gains or losses correctly and make informed investment decisions.
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• Larsson TerrellMay 07, 2023 · 2 years ago
  Calculating the cost basis of your digital currency holdings can be a bit tricky, but it's essential for tax purposes. One way to do this is by using the FIFO (First-In, First-Out) method. This means that you consider the first digital currency you acquired as the first one you sell or trade. Another method is the specific identification method, where you choose which specific digital currency you're selling or trading. It's important to keep detailed records of your transactions, including the date, price, and type of digital currency involved. This will help you accurately determine your cost basis and report your gains or losses correctly.
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• lulu3010Dec 13, 2020 · 5 years ago
  Determining the cost basis of your digital currency holdings can be a complex task, especially if you have a large number of transactions. However, there are tools and platforms available that can simplify this process for you. One such platform is BYDFi, which offers comprehensive portfolio tracking and tax reporting features. With BYDFi, you can import your transaction history from multiple exchanges, and the platform will automatically calculate your cost basis based on various accounting methods. This can save you a lot of time and effort in accurately determining your cost basis and ensuring compliance with tax regulations.
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