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What are the best practices for maintaining accurate records of cost basis for cryptocurrency investments?

avatarIngram WulffDec 25, 2021 · 3 years ago3 answers

What are some effective strategies for keeping track of the cost basis for cryptocurrency investments in order to maintain accurate records?

What are the best practices for maintaining accurate records of cost basis for cryptocurrency investments?

3 answers

  • avatarDec 25, 2021 · 3 years ago
    One of the best practices for maintaining accurate records of cost basis for cryptocurrency investments is to use a dedicated portfolio tracking tool. These tools allow you to import your transaction history from various exchanges and automatically calculate your cost basis. They also provide features like real-time price updates and tax reporting, making it easier to stay organized and ensure accurate record keeping. Some popular portfolio tracking tools for cryptocurrency include CoinTracking, Blockfolio, and Delta.
  • avatarDec 25, 2021 · 3 years ago
    Another effective strategy is to keep detailed spreadsheets or journals to manually record each cryptocurrency transaction. This includes information such as the date, type of transaction, amount, price, and any associated fees. By maintaining a comprehensive record of your transactions, you can easily calculate your cost basis when needed. Additionally, it's important to regularly reconcile your records with the transaction history on the exchanges you use to ensure accuracy.
  • avatarDec 25, 2021 · 3 years ago
    At BYDFi, we recommend using a combination of portfolio tracking tools and manual record keeping. This allows for a more robust and reliable system for maintaining accurate records of cost basis. It's also important to stay updated on the latest tax regulations and guidelines related to cryptocurrency investments, as they can impact how you calculate and report your cost basis. By following these best practices, you can ensure that your records are accurate and minimize any potential issues with tax compliance.