diff --git a/src/Capital-gains-reporting.md b/src/Capital-gains-reporting.md index b65b3ce..fb9579f 100644 --- a/src/Capital-gains-reporting.md +++ b/src/Capital-gains-reporting.md @@ -30,10 +30,10 @@ Cryptocurrency tax calculator apps exist to meet this need. They There are two kinds: -- Online cryptocurrency tax calculators. +- Online cryptocurrency tax calculators.\ Bitcoin.Tax, Cointracker, Coinledger, Koinly, Summ, TokenTax are some of these. While convenient, online calculators add rather serious privacy risk: when they are hacked or infiltrated, potentially your entire past, present and future cryptocurrency activities can be seen and analysed. -- Offline cryptocurrency tax calculators. +- Offline cryptocurrency tax calculators.\ These tend to be less featureful but more private, so we focus on them here. Some of them are: - [BittyTax] - UK and US variants (can do wallet-based cost tracking by using multiple configs) @@ -48,11 +48,13 @@ There are two kinds: ### Export from wallets to a cryptocurrency tax calculator From each real-world cryptocurrency wallet, + - export its lifetime history of transactions as CSV - transform this to the CSV format required by the tax calculator, and import it there - and add any extra configuration required to help the calculator build a true picture of events "Wallet" here has a broad meaning: + - a self-custodied wallet on a blockchain - or the wallet on an exchange - or each individual BIP 32 account within a multi-account wallet @@ -92,11 +94,13 @@ In the USA, calculating cryptocurrency gains requires: - tracking the acquisition date, cost, and wallet of every purchase/acquisition over your lifetime - tracking these across transfers/splits/merges/disposals - disposing them in a required order, such as: + - FIFO - first in first out - LIFO - last in first out - HIFO - highest cost first out - LOFO - lowest cost first out - SpecId - specific identification of lots + - and thereby calculating the capital gains or losses. Before tax year 2025, disposal order was determined with "universal cost tracking" -