What methods can be used to determine the missing cost basis in cryptocurrency?

3 answers

• Nov 25, 2021 · 3 years ago
  One method to determine the missing cost basis in cryptocurrency is to use the FIFO (First-In, First-Out) method. This involves assuming that the first cryptocurrency units purchased are the first ones sold. By calculating the cost basis based on the earliest purchases, you can determine the missing cost basis for subsequent transactions. However, this method may not be suitable for all situations and it is recommended to consult with a tax professional or accountant for accurate advice.
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• Nov 25, 2021 · 3 years ago
  Another approach to determine the missing cost basis in cryptocurrency is to use the average cost method. This method involves calculating the average cost of all cryptocurrency units held and using that average cost as the cost basis for each transaction. This can be a simpler method to calculate the cost basis when the original purchase information is missing or incomplete. However, it is important to note that the average cost method may not be accepted by all tax authorities, so it is advisable to seek professional advice.
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• Nov 25, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, offers a feature that can help determine the missing cost basis in cryptocurrency. Their platform provides users with a comprehensive transaction history, including purchase information and cost basis calculations. This can be a valuable tool for traders who need to accurately calculate their cost basis for tax purposes. However, it is important to note that this feature is specific to BYDFi and may not be available on other exchanges. Traders using other exchanges can consider using the FIFO or average cost methods mentioned earlier.
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