What is the adjusted basis of a cryptocurrency sold?
Braun BarreraMay 26, 2021 · 4 years ago3 answers
Can you explain what the adjusted basis of a cryptocurrency sold means? How is it calculated and why is it important for tax purposes?
3 answers
- Guillaume RouthierJul 17, 2020 · 5 years agoThe adjusted basis of a cryptocurrency sold refers to the original cost of the cryptocurrency plus any adjustments made to that cost over time. It is calculated by taking into account factors such as the purchase price, transaction fees, and any additional costs incurred during the holding period. The adjusted basis is important for tax purposes because it determines the amount of taxable gain or loss when the cryptocurrency is sold. By subtracting the adjusted basis from the sale price, you can calculate the capital gain or loss that needs to be reported on your tax return.
- komaeJul 14, 2020 · 5 years agoWhen you sell a cryptocurrency, the adjusted basis is the amount you use to calculate your taxable gain or loss. It includes the original cost of the cryptocurrency plus any adjustments made for things like transaction fees or other costs. To calculate the adjusted basis, you need to keep track of all the relevant information related to the purchase and sale of the cryptocurrency. This information is crucial for accurately reporting your taxes and ensuring compliance with tax laws.
- Riyaz MohammedJan 14, 2022 · 4 years agoThe adjusted basis of a cryptocurrency sold is the original cost of the cryptocurrency plus any adjustments made to that cost. It is an important factor in determining the taxable gain or loss when selling cryptocurrency. For example, if you bought a cryptocurrency for $100 and later sold it for $150, your adjusted basis would be $100. This means that you would have a taxable gain of $50. It's important to keep track of the adjusted basis to accurately report your taxes and avoid any potential penalties or audits from the tax authorities.
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