How can I adjust my cost basis for cryptocurrencies in order to minimize my tax obligations?

3 answers

• Dec 19, 2021 · 3 years ago
  One way to adjust your cost basis for cryptocurrencies and minimize your tax obligations is by using the specific identification method. This method allows you to choose which specific units of cryptocurrency you are selling, based on their cost basis. By selecting the units with the highest cost basis, you can reduce your capital gains and, consequently, your tax liability. However, it's important to keep detailed records of your transactions and the cost basis for each unit of cryptocurrency to accurately apply this method.
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• Dec 19, 2021 · 3 years ago
  Another strategy to adjust your cost basis for cryptocurrencies and minimize taxes is through tax-loss harvesting. This involves selling cryptocurrencies that have experienced losses to offset the gains from other investments. By strategically selling these losing assets, you can reduce your overall taxable income. However, be aware of the wash-sale rule, which prohibits repurchasing the same or substantially identical assets within 30 days of the sale. Consult with a tax professional to ensure compliance with tax regulations.
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• Dec 19, 2021 · 3 years ago
  At BYDFi, we offer a tax optimization feature that automatically adjusts your cost basis for cryptocurrencies. Our platform tracks your transactions and calculates the most tax-efficient way to sell your cryptocurrencies. This can help you minimize your tax obligations and simplify the process of adjusting your cost basis. Consider using our platform to streamline your tax planning and reporting.
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