What is a crypto cost basis?

Typically, your cost basis is the fair market value of your crypto at the time of receipt, plus any fees directly related to the acquisition. If you acquired your crypto at multiple price points, you can use a cost basis method like HIFO, LIFO, or FIFO to calculate your cost basis. You can’t pay your crypto taxes without knowing your cost basis.

What is the cost basis of a bitcoin?

If you paid USD 20,000 to acquire one bitcoin on August 1st, the cost basis would be USD 20,000. The cost basis is important because it's essential for calculating the gains and losses. While determining the cost basis for a particular coin is pretty straightforward, calculating gains and losses can quickly become complicated.

What is a cost basis?

At a high level, cost basis is how much you paid to acquire your cryptocurrency. Typically, your cost basis is the fair market value of your crypto at the time of receipt, plus any fees directly related to the acquisition.

What are the proceeds of a crypto sale?

The proceeds of your sale are how much you received for disposing of your cryptocurrency. Typically, this is the fair market value of your crypto-asset at the time of disposal, minus the cost of relevant fees. Why do I need to know my cost basis to calculate my crypto taxes? Cost basis is essential for calculating your capital gains and losses.