Is there a specific formula or calculation I can use to accurately determine the cost basis of my old digital currencies?

3 answers

• StonkiewonkieSep 02, 2020 · 5 years ago
  Determining the cost basis of old digital currencies can be a bit tricky, but there are some formulas and calculations that can help. One common method is to use the FIFO (First-In, First-Out) method, where you assume that the first digital currencies you acquired are the first ones you sold or exchanged. Another method is the specific identification method, where you track the cost of each individual digital currency and use that to determine the cost basis. It's important to keep accurate records of your transactions and consult with a tax professional to ensure you are calculating the cost basis correctly.
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• Alex SamFeb 07, 2021 · 5 years ago
  Calculating the cost basis of old digital currencies can be a headache, but fear not! There are some tried and true formulas that can help you out. One popular method is the average cost method, where you take the total cost of all your digital currencies and divide it by the total number of units you own. This gives you the average cost per unit, which you can then use to determine the cost basis of each individual digital currency. Remember to keep detailed records of your transactions and consult with a tax advisor for the best approach for your specific situation.
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• BarackJan 21, 2024 · 2 years ago
  Determining the cost basis of your old digital currencies can be a complex task, but don't worry, there are resources available to help you. One option is to use a cryptocurrency tax software or platform that can automatically calculate the cost basis for you. These platforms often integrate with popular exchanges and can pull in your transaction history to accurately calculate the cost basis. Additionally, some exchanges provide reports or tools that can assist with cost basis calculations. It's important to note that different exchanges may have different methods for calculating cost basis, so it's a good idea to familiarize yourself with the specific rules and guidelines of each exchange you have used. Remember to consult with a tax professional for personalized advice and guidance.
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