Bitcoin
BTC$42 499.74

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Ethereum
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Binance Coin
BNB$471.64

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Top 3 tips to remember when calculating your crypto taxes


06 Mar 2019

#Bitcoin

While cryptocurrencies are still waiting for a proper regulatory framework that would increase the investors' and traders' safety during their work with digital coins, paying taxes is already a reality, even when it comes to Bitcoin and other digital assets. In fact, it became a priority for US citizens in 2018, after the IRS announced that their major focus would be on taxation of virtual assets back in July.

The law currently sees cryptocurrencies as property, making them subject to rules regarding capital gains and losses. In this regard, they are the same as any other type of property, including bonds, stocks, real estate, and alike. However, the difficult part is that all of the data regarding crypto users' trades, investments, gains, and losses, is scattered throughout the space.

To properly calculate their taxes, crypto holders need to collect information from multiple exchanges and wallets. Additionally, they must include all of their purchases and sales, trades, mining income, transfers, but also air drops, forks, and splits, as well as any other type of activity. This can be quite a difficult task, which is why we have prepared three useful tips in regards to tax calculations.

Record everything


As mentioned, the biggest issue is collecting the data after an entire year of trading and investing. During this time, crypto users have likely gone through a number of exchanges and wallets, making it quite a chore to gather all of that data. What's more, users need to know the prices of coins at the time of conversions, purchases, sales, and alike.

All of this can take a long time to collect and recollect, which is why it is best to record this data right away. As soon as an action involving crypto is completed, users should write it down, as well as all the details regarding the action, such as the amount, the price, as well as time, date, and location.

Learn how calculating gains and losses works


According to the current laws, whenever you make gains through trading, you owe taxes on those gains. This is why it is important to calculate your gains, as well as taxes, precisely.

You can do this by using a formula that goes like this: Fair Market Value – Cost Basis = Capital Gain / Loss

In this case, Fair Market Value is the price you can get for a certain asset in an open market. Simply put, it is equal to the coin's value at the time of the sale. Cost Basis, on the other hand, is the asset's original value, and it is needed for tax purposes. In other words, this is the amount you pay to purchase the coin.

This allows you to calculate your gains and losses for each trade, but to do it properly, you need to know the coins' value at the time of sale/purchase.

This seems rather straightforward, and in some cases, it may be. However, for some traders, the situation is more complex, which is why the best course for action for them might be to hire a tax specialist who is familiar with crypto.

Report your losses


Making gains puts you in a position where you owe taxes to the government. However, if you are experiencing losses, you can actually reduce the taxes due to the lack of profit. Because of this, it is of great importance not to forget your losses, and report them just the same. It will save you money, and your taxes will get somewhat lower.


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Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 71.2% 55 $42 499.74 -1.69% 3.90% $804 612 153 299 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 67.2% 67 $3 240.18 -3.24% 7.66% $386 221 666 258 ETH 7 days price change
3 Binance Coin (BNB) BNB Binance Coin predictions 71.2% 55 $471.64 -5.87% 13.52% $78 669 453 462 BNB 7 days price change
4 Tether (USDT) USDT Tether predictions 93.6% 1 $1.000291 -0.01% 0.01% $78 422 379 350 USDT 7 days price change
5 Cardano (ADA) ADA Cardano predictions 74.8% 53 $1.48 4.97% 33.24% $49 641 760 562 ADA 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 92.8% 1 $0.999982 0.02% -0.02% $45 408 574 979 USDC 7 days price change
7 Solana (SOL) SOL Solana predictions 60.4% 78 $142.41 -5.01% 7.28% $44 738 935 131 SOL 7 days price change
8 XRP (XRP) XRP XRP predictions 71.2% 58 $0.760679 -2.17% 5.13% $36 256 323 649 XRP 7 days price change
9 Terra (LUNA) LUNA Terra predictions 71.6% 59 $80.99 -5.64% 18.07% $29 003 031 725 LUNA 7 days price change
10 Polkadot (DOT) DOT Polkadot predictions 75.6% 53 $26.06 -6.24% 12.03% $25 733 903 487 DOT 7 days price change
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12 Avalanche (AVAX) AVAX Avalanche predictions 65.6% 76 $88.17 -6.02% 6.34% $21 545 510 909 AVAX 7 days price change
13 Polygon (MATIC) MATIC Polygon predictions 70.8% 54 $2.27 -2.65% 14.59% $16 595 998 407 MATIC 7 days price change
14 SHIBA INU (SHIB) SHIB SHIBA INU predictions 72.8% 59 $0.000029 -5.71% 7.80% $15 821 241 817 SHIB 7 days price change
15 Binance USD (BUSD) BUSD Binance USD predictions 94% 1 $1.000713 0.14% -0.01% $14 457 507 802 BUSD 7 days price change

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