How is my capital gain/loss calculated?
The actual calculation varies by different jurisdictions, but the basic idea is simple. Your gains/losses are assessed by subtracting your cost basis and transaction fee from the fair market value (FMV) of the disposed of crypto assets.
If your transaction fee is paid in cryptocurrency, it should be valued at FMV and will separately result in capital gain/loss as it is considered a disposition of capital property. It is evaluated based on subtracting the cost basis from the FMV of the fee. The total capital gain/loss will be the sum of both dispositions.
You can click on the transaction to expand the section where we explain to you in detail how your capital gains/losses of the transaction and fee are calculated.
There are however other tax rules to consider in different countries, such as different cost basis methods to adopt. Please refer to this section for more information on different cost basis methods.
What is the cost basis used for the calculation?
Below are the common cost basis methods used for calculating taxes:
First in, first out (FIFO): Using first-in-first-out works exactly how it sounds. The first coin that you purchase (chronologically) is the first coin that is counted for sale.
Last in, first out (LIFO): LIFO works exactly the opposite of FIFO. Instead of selling off the first coin you acquired, you sell the last coin that came in (i.e. the most recent coins you acquired).
Highest-in, first-out (HIFO): Highest-in first-out works exactly how it sounds. You sell the coins with the highest cost basis (original purchase price) first.
Adjusted cost base (ACB): This is the method applicable to Canada and New Zealand. The ACB is the average cost of all coins, calculated by dividing the total amount you paid to buy your coins by the total number of coins you acquired.
Share pooling: This is specific to the United Kingdom. There are three specific rules to calculate your cost basis. When you dispose of your coins, you have to work through these three rules in the following order to determine your cost basis:
Same-Day Rule: coins acquired on the same day as the disposal are consumed first
Bed and Breakfasting Rule: coins acquired in the 30 days following the day of disposal (provided the person making the disposal was resident in the United Kingdom at the time of the acquisition) will be counted for sale first
Section 104 rule: this is similar to ACB where all previous coins purchased, the price averaged
Specific ID: With specific identification, you identify exactly which coin is being spent at transaction time. This can be ad-hoc or according to a pattern (e.g., highest-in-first-out [HIFO], last-in-first-out [LIFO], etc.). However, Crypto.com Tax doesn’t support this cost-basis method at this moment.
French Flat Tax (PFU): This is specific to France. There is a particular formula for calculating capital gains/cost basis if you are an occasional trader in France. When there’s a disposal, the cost basis is calculated by the fraction of the acquisition cost of your crypto portfolio (i.e. all of your crypto holdings) relative to the sales proceeds received from the disposal divided by total portfolio value (i.e. fair market value).
Crypto.com Tax currently supports cost-basis methods of FIFO, LIFO, HIFO, ACB, Share pooling, and PFU. We’ll continue to support more cost basis methods as our service expands to more jurisdictions that require other methods.
Does your service work for businesses?
Unfortunately, Crypto.com Tax is designed to help individual retail users prepare their taxes resulting from crypto transactions. It is not tailored for business needs. Please consult your tax advisors if you need any advice on crypto taxes for businesses.
Frequently Asked Questions
What if I spot an error in the calculation?
Please contact us via the chat button at the bottom right corner, or report any error at [email protected] with the following information:
Description of the error
How to reproduce the error
Generic CSV Template containing the required transactions
We’ll investigate the issue and get back to you as soon as possible.
Why is my capital gain/loss incorrect?
If you find the capital gain is unreasonably high, you may first check if the cost basis is correctly recorded. You can refer to this section for more details on cost basis.
You may also look for any error messages (e.g. missing purchase history) shown on the Transactions page. Please refer to this section on how to ensure your tax report is accurate.
Another reason for a wrong capital gain/loss is probably due to an inaccurate market price used. We use CoinGecko’s price API given at 00:00 am UTC of that particular day to determine the market price for every supported crypto. If you find the market rate we used is inaccurate, you may refer to this section on how to fix this.
Why is the cost basis different from what I paid?
The cost basis of disposal may be different from the cost you previously paid as the cost basis method varies based on your jurisdiction. You may refer to this section for different cost basis methods. Crypto.com Tax will consolidate your crypto in all imported wallets to determine the cost basis.
You first bought 1 BTC for $10,000 and then bought 2 BTC for $50,000. You eventually sold 2 BTC for $30,000.
If you are using FIFO (First In, First Out) method, the first coin (i.e. BTC) that you purchase is the first coin that is counted for sale. In this example, the cost basis of the 2 BTC disposed would be $35,000 [=$10,000 + $50,000/2].
If you are using ACB (Adjusted cost base) method, the cost basis of sale will be determined by the average cost of all crypto (i.e. BTC) you bought. The cost basis of the 2 BTC disposed is therefore $40,000 [=2 x ($10,000 + $50,000)/3] in this example.
Disclaimer: You acknowledge and agree that information provided by Crypto.com to you in your use of the Crypto.com Tax Services is for your reference only and should not be considered a substitute for legal advice, tax advice, audit advice, accounting advice, or brokerage advice under the guidance of a licensed professional. Further, the information provided herein should not be taken as financial planning or investment solicitation. You acknowledge and agree that no fiduciary relationship has been created between you and Crypto.com. You hereby understand and acknowledge that by using Crypto.com Tax Services, you are not being represented by a legal advisor, certified financial planner, tax professional, broker, other regulated advisor, or similar capacity.
There may be instances where you will be able to manually input information about your transactions. You acknowledge that you are solely responsible for any and all information entered and Crypto.com is not responsible for any information inputted incorrectly. Crypto.com makes no warranties as to the reliability or accuracy, completeness, or quality of any information you obtain through the Services.
This FAQ page is intended to be read in conjunction with the Crypto.com Tax Terms of Services.