common-close-0
BYDFi
Trade wherever you are!

How does the cost basis of digital assets affect capital gains taxes?

avatarflaviupop0Dec 25, 2021 · 3 years ago1 answers

Can you explain how the cost basis of digital assets impacts the calculation of capital gains taxes? I'm trying to understand how the purchase price of digital assets affects the amount of taxes I'll owe when I sell them.

How does the cost basis of digital assets affect capital gains taxes?

1 answers

  • avatarDec 25, 2021 · 3 years ago
    As an expert in the digital asset industry, I can tell you that the cost basis of your digital assets is a crucial factor in determining your capital gains taxes. When you sell your digital assets, the difference between the selling price and the cost basis is considered your capital gain or loss. If the selling price is higher than the cost basis, you'll have a capital gain and will owe taxes on that gain. However, if the selling price is lower than the cost basis, you'll have a capital loss, which can be used to offset other capital gains. It's important to keep track of your cost basis and consult with a tax professional to ensure you accurately report your capital gains taxes.