What is the cost basis definition for cryptocurrency transactions?

3 answers

• Nov 27, 2021 · 3 years ago
  The cost basis definition for cryptocurrency transactions refers to the original value of the cryptocurrency at the time of acquisition. It is used to determine the gain or loss when the cryptocurrency is sold or exchanged. The cost basis includes the purchase price of the cryptocurrency, any fees or commissions paid, and any other costs associated with the acquisition. The cost basis is important for tax purposes as it affects the calculation of capital gains or losses. It is essential to keep accurate records of the cost basis for each cryptocurrency transaction to ensure accurate reporting and compliance with tax regulations.
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• Nov 27, 2021 · 3 years ago
  The cost basis definition is like the starting point for calculating your profits or losses from cryptocurrency transactions. It's the value of the cryptocurrency when you first acquired it. When you sell or exchange the cryptocurrency, you subtract the cost basis from the selling price to determine your gain or loss. This gain or loss is then subject to taxation. So, if you bought a Bitcoin for $10,000 and later sold it for $15,000, your gain would be $5,000. The cost basis definition is crucial for accurately reporting your cryptocurrency gains and losses to the tax authorities.
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• Nov 27, 2021 · 3 years ago
  BYDFi, as a third-party cryptocurrency exchange, follows the industry-standard cost basis definition for cryptocurrency transactions. The cost basis is determined by the original value of the cryptocurrency at the time of acquisition, including the purchase price, fees, and other associated costs. This definition is important for accurate taxation and reporting of gains and losses. It is recommended to consult with a tax professional or use tax software to ensure proper calculation and reporting of cryptocurrency transactions.
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