Frequently Asked Questions

Product

Why should I use CoinTracker?

We built CoinTracker out of our own frustration keeping track of our crypto assets. Our users love CoinTracker for many different reasons, but some of the top ones include the fact that CoinTracker:

  • Automatically & securely syncs all of your cryptocurrency balances and transactions across major exchanges & local wallets
  • Comes with great customer service (we take your feedback very seriously)
  • Is super easy to use
  • Helps you figure out your crypto taxes
  • Is under active development — so it’s rapidly getting better and better

Give CoinTracker a try!

How does syncing work?

The Coinbase integration is done through Coinbase’s OAuth2 flow (Coinbase Connect). Our Coinbase integration requests read-only access to your Coinbase data.

All other exchanges are integrated by creating API keys on the exchange accounts and providing them to CoinTracker. Whenever possible, we ask that you provide only ‘View’ permissions to these API keys.

How frequently do you update cryptocurrency prices?

We update pricing multiple times per hour and are working on further improving this.

I get an error when I try to add an exchange. What should I do?

Please double check that you enabled all the requested read-access permissions per the instructions on the add exchange page. Also double check that you have correctly created the key, approved it via 2FA/email (if needed), and disabled IP restrictions (we will support this in the future). If this still doesn't work, please delete your API key and create a new one to try fresh.

How frequently do you synchronize my balances and transaction?

We update balances and transactions from your wallets and exchanges multiple times per day and are working on further improving this. You can always force a wallet refresh using the zippy next to the corresponding exchange on the wallets page.

Where do you get your pricing data?

We receive our pricing data from multiple sources, including CoinMarketCap and CryptoCompare.

Why is there a discrepancy between your listed price for Bitcoin and the price on my exchange?

For better or worse, there are actually quite large differences in the price of Bitcoin across exchanges, during volatile times it can be more than $1,000. Part of the reason for this is that there are different levels of liquidity and risk associated with different exchanges, leading to different amounts of demand and therefore pricing on those exchanges.

For simplicity we need to display a single value for pricing, so we try to pick a reasonable value taking into account the price across many exchanges. That said, we are also working on improving this number by personalizing the value to the exchanges that you use.

How can I track multiple Coinbase accounts on one CoinTracker account?

The Coinbase OAuth2 integration works based on the Coinbase account that you are signed into in the same browser as where you are viewing CoinTracker. In order to add additional Coinbase accounts to CoinTracker, simply go to coinbase.com in the same browser and log out. Then you’ll be able to log into whatever additional Coinbase account you want through the integration flow on CoinTracker.

Do you have native mobile apps?

Not yet. We are currently only on the web (although we do have a progressive web app for Android with a homescreen icon). However CoinTracker is mostly mobile-optimized so you can use it in your phone’s browser. We plan to launch iOS and Android native apps in the future.

What base currencies can I view my portfolio in?

We currently support viewing your portfolio in BTC, ETH, AUD, BRL, CAD, CHF, CLP, CNY, CZK, DKK, EUR, GBP, HKD, HUF, IDR, ILS, INR, JPY, KRW, MXN, MYR, NOK, NZD, PHP, PKR, PLN, RUB, SEK, SGD, THB, TRY, TWD, USD, ZAR. You can change your preferred base currency here.

Can you add XYZ coin?

We currently support over 2,500 different cryptocurrencies and we are adding more every day! That said, we don’t have data for every single coin. We generally automatically pick up coins as soon as they are listed on a major exchange. If you see a coin missing a price that is listed on a major exchange, please let us know at feedback@cointracker.io.

Why haven’t you added XYZ feature?

Either because we haven’t gotten to it yet or because we don’t know you want it. Email us at feedback@cointracker.io!

Privacy & Security

Are you a secure platform?

Security is a top priority for us. Please see the security measures we put in place to protect your security and privacy.

Is this a scam? Are you going to steal my crypto?

No. CoinTracker does not have access to your private keys nor the ability to withdraw your crypto. See more about our security here.

Do you sell my crypto data?

No. We will never sell your crypto data. See our full privacy policy here.

How do I delete my account?

You can delete your account and all your account data at any time from the settings page.

Business Model

Is this free?

CoinTracker’s portfolio tracker service is free. We charge for our tax reports.

How do you make money?

We offer paid services to help you figure out your crypto taxes and plan on introducing a paid subscription service for premium tracking features in the future.

Cost Basis

What is the difference between net fiat invested and cost basis?

Put simply, net fiat invested is how much fiat money you put into your current crypto holdings. Formally, net fiat invested is the total amount of fiat currency (e.g. USD, EUR, JPY, etc.) invested into crypto assets minus the total amount of fiat currency received from your crypto sales.

Note that this number can be zero if all your crypto is a gift, if you have never bought any crypto, if you are a merchant who only gets crypto as a form of payment (but never pays for it), or if you sell your crypto for the same amount that you paid for it with fiat currency. Net fiat invested can also be negative, for example, if you sell your crypto for more than it cost to buy it in the first place.

Cost basis is similar to net fiat invested, but with some key differences. Formally, cost basis is the total fair market value of your currently held crypto assets at the time you acquired them. This value is used to determine the capital gains tax when you sell your crypto assets.

The differences between cost basis and net fiat invested occur when the value of your crypto holdings changes, but not due to a change in the amount of fiat used to acquire those holdings. For example, if someone gifts you bitcoin and it appreciates in value, then you take on the donor's cost basis at the time of the original purchase of that coin), however your net fiat invested is unchanged. Also if you trade a bitcoin for an ether, then your cost basis will adjust to incorporate the sale of the bitcoin and the purchase of an ether at fair market value, whereas your net fiat invested is still unchanged. Similarly if you get a forked asset (e.g. Bitcoin Cash from your Bitcoin holdings), then your cost basis will increase accordingly, however your net fiat investment is unchanged.

On the other hand if you buy $1,000 worth of bitcoin, your cost basis and net fiat invested both increase by $1,000. The same applies in reverse if you sell $1,000 of bitcoin (both cost basis and net fiat invested decrease by $1,000). Transfers within a user’s wallet don’t affect net fiat invested nor cost basis. Note that while net fiat invested can be negative, cost basis is always a non-negative number.

Here are some examples to make it clearer:

Event Crypto Holdings Net Fiat Invested Cost Basis Market Value
Jon buys 1 BTC for $1,000 1 BTC $1,000 $1,000 $1,000
Jon receives a gift of 1 ETH (fair market value is $100; gifter’s basis was $50 when purchased) 1 BTC, 1 ETH $1,000 $1,050 $1,100
BTC price goes from $1,000 → $10,000; ETH price goes from $100 → $250
Jon sells 0.1 BTC for 4 ETH (fair market value is $1,000) 0.9 BTC, 5 ETH $1,000 $1,950 $10,250
Jon moves 4 ETH to his hardware wallet 0.9 BTC, 5 ETH $1,000 $1,950 $10,250
BTC forks with 1 BCH for every BTC (fair market value for BCH is $100) 0.9 BTC, 0.9 BCH, 5 ETH $1,000 $2,040 $10,340
Jon sells 0.9 BTC and 4 ETH for $10,000 0.9 BCH, 1 ETH -$9,000 $340* $340
*Based on FIFO calculation (see below)
How is cost basis calculated?

In order to calculate cost basis, we look at the fair market value of the amount being paid (left side of transaction) at the moment of the transaction. So for example, if you are paying $1,000 USD for 1 BTC, then the cost basis is $1,000. If you are paying 1 BTC for 10 ETH, then your cost basis is the fair market value of 1 BTC at that time. For fiat currency, it's easy — the value of the fiat is the cost basis. If it's a crypto payment, then we look up the fair market value of that coin at that time from different sources (e.g. exchange, cryptocompare, etc.).

All calculations default to a first-in first-out (FIFO) model. We also support additional methods of specific identification (such as highest-in-first out [HIFO] and last-in-first-out [LIFO] from the settings).

My cost basis/ROI/capital gains are totally wrong. Why?

Please make sure you have considered the following:

  • Correctly calculating cost basis/ROI/capital gains requires complete history of how you got the coins you have today, and in which wallets they are located. Please add your full crypto trade history (e.g., fiat → crypto → crypto → fiat) across all your trades, exchanges, and wallets (including cold/local/hardware wallets). You can do this by adding all the exchanges you used to trade, syncing wallets, and adding transactions manually or in bulk
  • Outgoing (send) transactions are treated as taxable sales to a third party by default. The reason this is done is because without the receiving wallet, CoinTracker cannot distinguish a transfer to your wallet from a sale to a third party wallet, and so defaults to a sale to be conservative with tax reporting. If these are in fact non-taxable transfers instead of taxable sale events, please add the receiving wallet/exchange and we will automatically match up the transaction (or alternatively you can mark the transaction as a transfer using the down arrow next to the transaction from the Transactions page)
  • If you use Coinbase and GDAX: please make sure to connect both of them to CoinTracker (Coinbase tracks trade history separately from GDAX)
  • If you use Bittrex: please bulk upload your transaction history via CSV from the zippy next to the exchange on the wallets page (the Bittrex API only supports a rolling 30 day window for trade history, but you only need to upload the CSV once)
  • If you use Gemini: please bulk upload your crypto (not fiat) withdrawal & deposit history via CSV from the zippy next to the exchange on the wallets page. You'll need to either do this in bulk, or manually one deposit/withdrawal at a time to keep your information correct (unfortunately their API does not support withdrawals and deposits)
  • If you use Liqui: please manually add deposit and withdrawal transactions. To do so, navigate to Liqui from the from the wallets page and using the down arrow next to the wallet, select "Add Manual Transaction" (unfortunately their API does not support withdrawals and deposits). Additionally unfortunately Liqui's API has stopped reporting history before 2018 so please make sure to add those transactions manually as well
  • CoinTracker does not yet support margin trading. If you performed margin trades, please let us know so we can prioritize adding these features
  • Pending transactions are not included in the current market value (they are automatically added once the pending trade is completed)
  • Verify that your transactions which "need review" are complete, accurate, and not missing any transaction history

If you have done all of the above and there is still a problem, send us an email at feedback@cointracker.io.

Why are transactions to my local wallets being marked as taxable "send" events instead of "transfers"?

CoinTracker uses the information you tell it about to track your transaction history. If you add an exchange that has outgoing BTC withdrawals to your local BTC wallet, but don't add your BTC wallet, then CoinTracker does not know if the wallet is yours, a friend's, or a merchant's. Therefore, to be conservative, the default assumption is that a non-tracked wallet is not yours and therefore a taxable send event.

If that is incorrect and the transaction should instead be a transfer to a local wallet that you control, then the fix is to simply add your local wallet to CoinTracker (we currently support BTC, ETH [inclduing ERC20 tokens], LTC, and DOGE local wallets). If you run into any issues, please see the cold wallet FAQ below.

If the transfer is for a wallet we do not yet support, then you can mark the transaction as a transfer using the zippy next to the transaction from the transactions page. Behind the scenes, this simply adds the same amount of coin which was Sent/Received as Received/Sent. You can undo the operation by manually editing the transaction back to its original state.

How do I account for crypto stored in my local/cold/hardware wallet?

The easiest way to track this is by adding your wallet's public address. We support BTC, ETH (including ERC20 tokens), LTC, and DOGE today. If you have other coins in cold wallets, then let us know (feedback@cointracker.io) which ones so we can prioritize adding local wallet support for those blockchains. In the short term, you can mark any outgoing/incoming transaction from an exchange to a non-tracked cold/local wallet as a transfer using the zippy next to the transaction from the transactions page.

We are also working on adding xpub support for popular wallets like Ledger Nano S, Trezor, Jaxx, Exodus, etc. so that you can simply enter one address per wallet and have all transactions sync automatically. If you are having any problems with hardware wallet addresses, please see here.

Why is my local/hardware wallet address showing zero balance?

Please ensure that your wallet address is actually correct and actually has a non-zero balance (you can verify using a Bitcoin, Ethereum, Litecoin, or Dogecoin block explorer. Most good wallets generate a new address for each receive transaction to protect your privacy & security, so instead of adding your latest receive address (which has zero balance), you'll want to add the historically used addresses that actually have your balance. Here is how to get your address history for common wallets:

  • Ledger Nano S
    • BTC & LTC: get full list of addresses from your list of transactions in the Ledger Bitcoin Wallet (not the latest, un-used receive address)
    • ETH: by default there is only one ETH address (the receive address), however if you used multiple ETH addresses you can see them on MyEtherWallet
  • Trezor
  • Coinomi: from the "receive" tab of your wallet click "PREVIOUS ADDRESSES"
  • Exodus: navigate from the top toolbar menu: Exodus > Developer > Assets > [Coin] > Export Addresses (where [Coin] is the coin you are trying to export addresses for)
  • Electrum: View > Show Addresses and then navigate to "Addresses"
  • Jaxx: navigate from toolbar: MENU > Tools > Display Private Keys > (I UNDERSTAND) > Display token Keys (only copy the public addresses, not private keys)

We are also working on adding extended public key (xpub) support so that you can enter one address per coin per wallet. If you have verified all of this information and are still seeing issues, please email us at feedback@cointracker.io.

Why does my market value not match from the dashboard and chart?

The market value is calculated based on your current crypto holdings tracked by CoinTracker. The chart's market value is computed based on your historical transaction history. If your complete trading history (e.g. all fiat → crypto → crypto → fiat transactions across all exchanges and wallets) is not tracked by CoinTracker, then these will not be accurate and not match. In order to fix this, please follow the instructions from above.

Why does my portfolio not match my wallets?

Your performance/portfolio is the sum of the current holdings in your wallets/exchanges plus manual transactions you have entered. If these don't match, the difference is your manual transactions. You can review these here.

How can I track an ICO or token sale?

Depending on the type of the ICO, it will vary. If you send payment and immediately receive the ICO coin/token, then you can either let the transaction sync via wallet or add a manual entry for this single transaction. More common however is the situation where a payment occurs and the coin/token is received at a future date. In this scenario if the payment is in crypto (e.g. BTC, ETH, etc.) you can edit the outgoing payment to treat it as though you are receiving the fair market value of the coin in fiat (e.g. USD, EUR, CAD, etc.) on the date of the payment. Then, on the date of the received coin/token, you can also edit that coin and treat it as though you are paying that same fair market fiat value for the received coins.

Why can’t I just edit my own cost basis?

We are working on adding this feature soon.

Investing

How do I get rich quick off of crypto?

We recommend avoiding this mentality when investing. Have folks made a lot of money quickly with crypto assets? Yes. However, many folks have also lost a lot of money; you just don’t hear about those stories in the media.

Make sure to always understand anything you are investing in before doing so, or at least make sure you have someone you trust watching your back.

Which coins should I buy?

CoinTracker does not provide investment advice.

That said, there are many factors to consider when making a crypto investment, such as purpose or utility of a coin, reputation of the team, whitepaper, code (how much active development is going on), which exchanges are listing the coin, is it a coin with its own blockchain or a token on an existing blockchain (e.g., ERC20 tokens on Ethereum), etc.

In general, avoid get rich quick schemes and don’t fall for pressure to invest NOW!!! There will always be more opportunities for investment, and it’s better to miss an opportunity that you don’t understand or aren’t comfortable with than jump onto a bad/scam investment.

CoinTracker is also planning on piloting a service to help you setup your own crypto basket. Feel free to check out more details here.

Tax

Disclaimer: CoinTracker is provided for informational purposes only. This service is not intended to substitute for tax, audit, accounting, investment, financial, nor legal advice. For financial, tax, or legal advice please consult your own professional. The information on CoinTracker is subject to change without notice. All information is provided "as is." CoinTracker disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Please see our full disclaimer.

How are cryptocurrencies taxed?

Tax laws vary around the world. Please familiarize yourself with the tax rules that apply to you based on your country/jurisdiction.

Most countries consider cryptocurrencies to be capital assets. Therefore if the asset appreciates in value and you sell/trade/use it for profit, the gains are taxed like capital gains. If the asset depreciates in value and you sell/trade/use it at a loss, you may be able to deduct the losses against other capital gains to reduce your taxes.

The amount of tax depends on how much capital gain/loss there has been on the asset, how long you have held the asset, and the specific regulations in your country/jurisdiction. Because each taxable event may create a capital gain, you need to know the date, cost basis, sale value, and any fees associated with each transaction.

Generally speaking, these are considered taxable events:

  • Selling cryptocurrency for fiat currency (i.e. USD, CAD, EUR, JPY, etc.)
  • Trading cryptocurrency for other cryptocurrency
  • Using cryptocurrency to buy a good or service
  • Receiving cryptocurrency as a result of a fork or from mining

On the other hand, the following are generally not considered taxable events:

  • Buying cryptocurrency with fiat currency
  • Donating cryptocurrency to a tax-exempt organization
  • Gifting cryptocurrency to anyone (if the gift is sufficiently large it may trigger a gift tax)
  • Transferring cryptocurrency from one wallet that you own to another wallet that you own

How does the United States Internal Revenue Service (IRS) treat cryptocurrency?

In 2014, the IRS released guidance on virtual currencies (i.e. cryptocurrencies). Some highlights include:

  • Cryptocurrencies are treated as personal property (not currency) and are therefore taxed as capital assets
  • Capital gains from selling cryptocurrency for fiat currency (e.g. USD) or using cryptocurrency to purchase goods or services are subject to capital gains tax
  • Cryptocurrencies that are obtained from mining are taxable as income at their fair market value at the time they are received
  • Mining equipment can be deducted as a legitimate business expense

In what jurisdiction are US citizens taxed on cryptocurrency?

All US citizens and US residents are subject to a worldwide income tax. Any currency — fiat or crypto — earned anywhere in the world is taxable. For example buying a product/service using cryptocurrency that has appreciated in value is taxable, as is realizing a capital gain on a foreign crypto-exchange.

In addition, states have their own additional tax regulations around cryptocurrency which may be in addition to whatever regulations apply.

Do I need to pay tax on my cryptocurrency?

If you traded, sold, or used any of your cryptocurrency to purchase something, then you may need to pay tax on these assets. If you were gifted or given cryptocurrency as payment, salary, or as a gift/donation, then this income should be reported just like any other income you receive.

If you are just buying cryptocurrency with your own money and storing it (no selling/trading/using it), then you likely do not need to pay tax on it. #HODL

What if I only traded crypto:crypto within an exchange without cashing out to fiat?

That is still a taxable event and treated the same as if you sold your cryptocurrency for fiat and then bought new cryptocurrency with that fiat. The taxable event is selling cryptocurrency (whether for cryptocurrency or fiat), not whether you cash out of an exchange with fiat currency.

If I buy something with crypto is that a taxable event?

Probably, but it depends on the rules of your country/jurisdiction. If it is considered a taxable event in your country, then you would be paying tax on the capital gains (the amount that the asset appreciated while you held it).

For example let’s say you bought one bitcoin for $1,000 and then you bought a car with that bitcoin. At the time of the purchase, the bitcoin was worth $20,000. The $19,000 of capital gains are taxable.

How are cryptocurrencies taxed if I earn them rather than buy them?

Most countries consider earning cryptocurrencies as a barter transaction (payment-in-kind). This means that you would be taxed as though you had earned an equivalent amount of fiat currency as income.

For example, if you earned one bitcoin, valued at $1,000, then you would be taxed as though you earned $1,000 of income.

What if I receive or give cryptocurrency as a tip or gift?

Gift and tipping rules vary from country to country. If required to report as taxable income, you would simply convert the cryptocurrency to their fair market value at the time they are received. Generally giving cryptocurrency as a gift is a non-taxable event for the giver, unless it meets the threshold for a gift tax. For the receiver, in addition to any taxable income that may be relevant, you will also take on the cost basis of the cryptocurrency from the donor.

There is however an important exception if the donor's basis was higher than the market value of the bitcoin at the time of the gift (i.e. there was a capital loss on the coins at the time of the transfer). In this case, the receiver should recalculate their capital gain/loss using their basis as the market value of the bitcoins on the date of the gift. If there is still a loss from the donor's original basis, then the receiver can proceed using the gift-date market value as the basis. If however there is now a capital gain, US tax law says to ignore the gain and report nothing (e.g. there is no capital gains event!). Note: the receiver always takes on the original donor's original purchase date for the coin in short/long-term capital gains calculations.

This is very confusing, so here's an example to demonstrate. Let's say that Rashmi buys one bitcoin for $1,000. Two years later she gives it to Jon when the price of bitcoin is $500. Ten days later Jon sells the bitcoin. Consider the following scenarios:

  1. Jon sells the bitcoin for $1,100. He takes on Rashmi's original basis of $1,000, and has a long term capital gain of $100.
  2. Jon sells the bitcoin for $400. Since there is a capital loss using Rashmi's basis, he can't use that basis. Instead, he takes on the basis of the fair market value of the bitcoin at the time of the transfer ($500), leaving a long term capital loss of $100.
  3. Jon sells the bitcoin for $900. Again, since there is a capital loss using Rashmi's basis, he can't use that basis. He takes on the basis of the fair market value of the bitcoin at the time of the transfer ($500), however now this would yield a capital gain of $400, so instead you disregard the sale and nothing should be reported.

This is a counter-intuitive tax scenario, so it may help to think of this treatment as a way to prevent folks from sharing their capital losses with friends. Regardless, make sure to keep records any time you receive a crypto-gift, of the donor's original basis, acquisition date (which you always inherit), as well as the fair market value of the coin on the date of the gift.

What happens if I receive crypto from a fork or airdrop?

For context there are two types of forks: hard and soft. A hard fork is when a cryptocurrency splits into 2+ branches because the existing code for the coin is changed. This results in the original version and a new version (or versions) of the coin. An example is Bitcoin and Bitcoin cash (fork). With a soft fork, the code for the coin is getting changed but it is backward compatible with older versions so it is more like an update resulting in one updated blockchain (rather than 2+ blockchains). Airdrops are free coins that are sent to your wallet. These are generally done as a marketing/publicity move by coins to increase awareness of their token and you may not even know that this has happened (until you check your CoinTracker account!).

There is some debate about how to treat forked & airdropped coins (e.g. as a stock dividend, etc.) as there is no authoritative guidance from the IRS. That said, the most conservative and sensible approach seems to be following well-established “treasure trove” doctrine where the IRS has long held that “found” money is a taxable event.

So for example if you own one bitcoin (BTC) and it forks into one bitcoin (BTC) and one bitcoin cash (BCH), then the one BCH you receive needs to be reported as taxable ordinary income (not a capital gain). This is true whether or not you sell your BCH. In addition, the amount you use for your reported income becomes your basis for the new BCH, and what you will use to calculate capital gains when you sell your BCH. The same logic applies if you were airdropped a new token.

There is also some debate as to the exact method for calculating the fair market value for the BCH. For example there could be a time delay between when the fork occurs and when you gain control of the forked coin depending on whether you are using a local wallet or an exchange wallet. One simple, straightforward approach is taking the price at the time the forked coin (BCH) becomes available to you in your wallet (whether on an exchange or a local wallet) as the price for basis and taxable income. Note that some argue that the cost basis should be zero for forked coins and all upside should be considered capital gains, though this is a more aggressive approach. If you are unsure what to to here, please consult your tax professional.

CoinTracker allows you to mark any received coins (from the Transactions page) as "airdropped", "forked", "income", or "mined" so you can see the amount of income you had (on the Tax page), in addition to the capital gains which are already tracked.

How do I report mined cryptocurrency?

It depends on whether you are a hobby miner or a self-employed (business) miner. Here are some of the measures that the IRS provides for determining which camp you are in:

  • The manner in which the taxpayer carries on the activity
  • The expertise of the taxpayer or his advisors
  • The time and effort expended by the taxpayer in carrying on the activity
  • Expectation that assets used in activity may appreciate in value
  • The success of the taxpayer in carrying on other similar or dissimilar activities
  • The taxpayer’s history of income or losses with respect to the activity
  • The amount of occasional profits, if any, which are earned

As you can see, there is some amount of subjectivity to the classification. As an example, if you have a full-time custom mining rig, you are probably a business, and if you are randomly doing some mining on an old computer, you are probably a hobbyist. In both cases you will need to report your mined coins as taxable ordinary income and your basis will be the fair market value at the time you receive the coins.

If you are a hobbyist:

  • Income will go on line 21 (other income) of your Form 1040 (US Individual Income Tax Return)
  • Expenses directly associated with mining will go on a Schedule A form (Itemized Deductions); miscellaneous subject to 2% of AGI limitation (does not apply in 2018 onward)
  • Your income is not subject to the 15.3% self-employment tax (only normal income tax), however you receive fewer and less valuable deductions against your income

If you are a business miner:

  • Income and expenses both go on a Schedule C form (Profit or Loss from Business)
  • Your income is subject to the 15.3% self-employment tax, though there are more valuable deductions against your income

What if I donate my cryptocurrency?

In the US, if you donate your cryptocurrency to an IRS-recognized tax-exempt charity (e.g. 501(c)(3) organization), the IRS does not require you to pay capital gains on the transaction and you can deduct the value of your donation based on the fair market value of the cryptocurrency on the date of the donation.

Do wash sales apply to cryptocurrency?

A wash sale occurs when you incur a capital loss, and then buy a replacement stock or security within a 30-day window before or after the capital loss is incurred. For example, let’s say you buy a Google stock for $1,000 on January 1, sell it for $800 on January 10. You have incurred a capital loss of $200. Let’s say however than within 30 days (before or after) January 10 (even if it falls on a separate taxable year), you buy another Google stock — that is considered a wash sale and you cannot deduct the capital loss. Wash sales are in place to prevent people from taking losses in one tax year and then immediately buying back into the stock.

There is some debate as to whether wash sales apply to cryptocurrency sales, however the IRS specifically states that wash sales only apply to stocks and securities. Since the IRS has also issued guidance that cryptocurrencies are property, we do not calculate/apply wash sales. You should consult your CPA or tax professional for further advice on whether to apply wash sales to your cryptocurrency trades.

Can I apply like-kind exchange to my cryptocurrency trades?

A like-kind exchange allows you to swap property with someone else without having to pay taxes as long as the property being exchanged is “like kind” (i.e. similar). Typically these rules are meant to apply to real estate transactions, however there is some debate about whether they apply to other types of transactions such as crypto:crypto trades.

Most experts believe that crypto:crypto trades do not qualify for like-kind exchanges, and this is also the conservative approach so it is the philosophy we follow as well. Specifically every like-kind exchange does not apply by default; rather every transaction needs to be filed on an IRS Form 8824. Yes that means every single crypto:crypto transaction would need to be completed on it's own Form 8824. On top of that, the IRS requires the use of a Qualified Intermediary for multi-party like-kind exchanges (such as a transaction on a centralized crypto exchange). To the best of our knowledge, no centralized exchanges complete the necessary paperwork to be a Qualified Intermediary. This argument may not apply to decentralized peer-to-peer exchanges or in-person transactions, however even in those cases it seems like a large stretch to apply the like-kind framework. Additionally, in 2018, the IRS has clarified that like-kind exchanges only apply to real estate (i.e. not cryptocurrency).

What is my tax rate for my crypto gains?

In the US, the amount you pay in federal taxes on your crypto gains depends on how long you have held the coins and your ordinary tax rate.

If you have held coins for one year or less, they are considered short term capital gains. In this scenario, the gains are simply added to your income for tax purposes and taxed at your ordinary income tax rate (you can look this up here). This is the higher tax treatment scenario.

If you have held the coins for more than one year, they are considered long term capital gains. In this scenario, the gains are taxed between 0 – 20% depending on your ordinary income tax rate (you can look them up here). This is the lower tax treatment scenario.

For example let’s say that your annual income is $50,000 and you are filing as single. You buy one bitcoin on January 1, 2016 for $400 and sell it on January 1, 2017 for $1,000. You have a short term capital gain of $600, which taxed at your ordinary income tax rate of 25% results in a tax of 0.25 * $600 = $150 in additional federal taxes.

Instead let’s say that your annual income is $30,000 (still filing as single). You buy one bitcoin on January 1, 2016 for $400 and sell if on January 2, 2017 for $1,000. You have a long term capital gain of $600. Your ordinary income tax rate is 15%, and your long term capital gains rate is 0%. Therefore you pay no federal tax on this bitcoin sale (state taxes may still apply).

You can read more about IRS’s guidance on short and long term capital gains here. There is also an additional 3.8% Net Investment Income Tax for high income individuals.

Do I have to report every transaction where I buy something with cryptocurrency?

If your government has judged that capital gains were made when you spend cryptocurrency, then yes (like in the U.S., for example). This includes crypto:crypto trades.

How can I figure out my crypto taxes?

CoinTracker offers a few different methods to help you figure out your U.S. crypto taxes. Additionally, if you are in the United States, you can refer to the IRS’s guidance on cryptocurrency taxes. Beyond that, you should consult your tax professional to understand how much tax you owe.

What options do I have for calculating my capital gains?

In the US, the IRS has not released any specific guidance for capital gains calculation methods for cryptocurrency transactions. They have however released Publication 550 about stocks, bonds, and mutual funds. If we apply this guidance to cryptocurrency, it states that there are two options for calculating capital gains: first-in first-out (FIFO) and specific identification. The simplest and most conservative method is FIFO, which is what CoinTracker provides by default. FIFO means that the first coin that you purchase (chronologically) is the first coin counted for a sale. With specific identification, you identify exactly which coin is being spent at transaction time. This can be ad-hoc or according to a pattern (e.g., highest-in-first-out [HIFO], last-in-first-out [LIFO], etc.).

Note however that with specific identification, you must specify to your broker/exchange, at the time of the exchange, which specific stocks (or in this case coins) you are selling/trading. Notably, this cannot be done retroactively and you must receive written confirmation from the broker/exchange that they transacted the specific coins you identified in order for specific identification to be applied. If you have questions, please consult your tax professional for guidance on your personal situation.

In Canada, the CRA requires using Adjusted Cost Base (ACB). Your capital gains go onto your Schedule 3 Form. See here for an explanation of how ACB works.

What are total proceeds and total cost basis? Why are they so high? How is my capital gain positive when I've lost market value in my portfolio?

Total proceeds is the aggregate sum of the fair market value of all your crypto at trade/sell time across all your transactions (shown per taxable year on the tax page). In other words, the total fiat-value equivalent you got across all your crypto sells/trades. Total cost basis is the same — aggregate sum of the fair market value of all your crypto — but for at trade/receive time. Basically how much was all the crypto you had worth at the time you got it. The difference between these two values is your capital gain.

Depending on how frequently you trade crypto, these numbers can vary wildly from your net fiat invested (the amount of fiat money you have put into crypto). For example, if you buy 1 BTC for $1,000 and then sell 1 BTC for $2,000, then your total proceeds are $2,000, your total cost basis is $1,000, your total capital gain is $1,000, and your market value of crypto is $0. You have made $1,000 and get taxed on it — great! If instead you buy 1 BTC for $1,000 which appreciates in value to $10,000 and then trade it for some ETH, and then the price of that ETH crashes to $100, then your total proceeds are $10,000, your total cost basis is $1,000, your capital gain is $9,000, and your market value is $100. You have lost $900 but have a capital gains tax bill on $9,000 — yikes! If you do lots of crypto day-trading, this can lead to huge amounts of total proceeds and total cost basis (sometimes multiple orders of magnitude more than the amount of net fiat invested), but what matters is your capital gain (the difference between the two).

It is also a good idea to double check your complete transaction history to make sure that it is accurate and the list of common reasons for incorrect cost basis to make sure none of those apply to your account. If you have any questions, please email us at feedback@cointracker.io.

After purchasing a CoinTracker tax plan, how can I file my crypto taxes?

Option #1: File manually yourself. You can download your completed IRS Form 8949 and cost basis history from the tax page. Don't forget to add your name and SSN to the 8949 pages (we don't ask this from you to protect your privacy). Additionally, the overall capital gains summary by long and short term is broken down on the tax page as well for your Schedule D.

Option #2: File with your existing accountant/tax filer. Again, you can download your completed IRS Form 8949, cost basis history, and capital gains summary from the tax page. Simply forward along these files to your accountant/tax filer and they should know what to do with them. If they run into any problems, please email us at tax@cointracker.io.

Option #3: File with a crypto advisor. Same as option #2, however we can refer you to a tax advisor familiar with crypto. You will see an offer to get connected to someone with a $50 discount on the tax page after you purchase a tax plan.

Option #4: File using tax software (e.g. TurboTax). Unfortunately, TurboTax's online version of their software does not support importing transactions. To import your crypto transactions into the Downloadable/CD version of TurboTax (here's how to switch if you are already using the online version). Note that TurboTax has a hard limit of 3,000 entries — if you have more than this then you won't be able to use TurboTax to file your taxes:

  1. Open TurboTax for your current return. Click File > Import > From Accounting Software (Windows) or File > Import > From TXF Files (Mac)
  2. Select Other Financial Software (TXF file) and click Continue
  3. Click Browse Files..., find the ".txf" file from CoinTracker, and select Import Now
  4. The file should show up as 1099-B. Select Import Now.
  5. Click Done on the next screen.
  6. From the top menu, navigate to PERSONAL > Personal Income and scroll down to Investment Income. You should see the new entries added here.
  7. Click Start (or Update if you have already been here) next to "Stocks, Mutual Funds, Bonds, Other"
  8. Notice that Needs info? says YES. There is no Institution Name set for the data because crypto data is not set to one institution. This is expected and you can ignore this warning
  9. Click Edit to see the information that has been entered or Done to finish. Note that this only works for up to ~2,000 transactions. Beyond that you'll have to manually enter the summary information and then mail in the Form 8949 separately (TurboTax walks you through this process).

Option #5: File using Credit Karma. Unfortunately they do not support uploading your Form 8949, so you will have to manually enter the lines from your form into their tool.

Option #6: File using H&R Block. Instructions are here.

How often are cryptocurrency taxes due?

The U.S. has a pay-as-you-earn tax system. That means, when you get a paycheck from your employer, taxes are withheld throughout the year. When you run a business, you pay quarterly taxes. When you owe more than $1,000 in capital gains for the year, you should be making quarterly payments as well (if you owe less than $1,000, then one annual payment is fine). Here is IRS’s guidance on quarterly taxes for capital gains.

You should be making your best estimates and if you overpay or underpay, you can correct this at the end of the year using Form 2210 (Underpayment of Estimated Tax by Individuals, Estates, and Trusts). If you do not make estimated quarterly payments when required, or underpay too much, there are fees.

How can I file a tax extension

You can extend your filing deadline easily and for no extra fee by completing Form 4868. Note that this does not extend your payment deadline, only your filing deadline, so you will still need to pay at least 90% of your final tax bill to avoid fees.

You can estimate your taxes owed using a tool like Tax Caster and the tax summary information on the Tax page. You can submit payment for estimated taxes owed (if applicable) through the IRS website (Reason for payment: extension, Apply payment to: 4868, Tax Period for Payment: 2017).

Which tax forms do I need to complete?

You should consult your tax professional to figure this out.

Generally speaking, in the U.S., you will want a Form 8949 (Sales and Other Dispositions of Capital Assets) complete with your cryptocurrency transaction history, a summary of your overall capital gains (across all assets) on your Schedule D (Capital Gains and Losses), and then your Form 1040 (Individual Income Tax Return).

Additionally, if any of your cryptocurrency assets were lost or stolen, you will want to complete Form 4684 (Casualties and Theft — note this is only allowed before 2018). If you held $10,000 or more on a foreign exchange (non-US based) at any time during the tax year, you need to file a FBAR. If you held more than $75,000 on a foreign exchange during the tax year, then you must additionally file a Form 8938 (Statement of Specified Foreign Financial Assets, a.k.a FATCA) if, on a foreign exchange, you held either more than $75,000 (at any time during the tax year) or more than $50,000 (on the last day of the tax year). If you underpaid your quarterly taxes for capital gains, then you will want to complete a Form 2210 (Underpayment of Estimated Tax by Individuals, Estates, and Trusts).

I don't have enough fiat money (e.g. USD) to pay my taxes. Should I sell crypto to pay my taxes? If so, won't they be taxed again?

In general, you should always gross up your crypto sales for taxes when taking profits trading cryptocurrency. As an example, let's say that your effective tax rate on capital gains is 33%. If you are trying to cash out $10,000 of profits from your bitcoin holdings, you should sell $15,000 worth of bitcoin and set aside $5,000 for taxes (33% of $15,000 is $5,000, leaving the $10,000 that you want to cash out). For help with your specific situation, you should consult your tax professional.

Where can I get tax advice on cryptocurrency?

Please speak with a Certified Public Accountant (CPA), Enrolled Agent, tax lawyer, or other tax profession who is familiar with your financial situation and the local tax laws. We offer $50 off a crypto tax filing service after you purchase one of our tax plans.

How can I avoid paying crypto taxes?

You should always pay your taxes.

There is a good chance you’ll get caught if you try to evade crypto taxes, and you don’t want to be paying late fees to your government or worse. Remember, all transactions on the blockchain are on a public, immutable ledger forever. If your government ever finds out that you tried to evade taxes, then can impose penalties on you retroactively.

Additionally, many exchanges are starting to report trading history to governments either proactively or due to government subpoenas, and governments themselves are starting to get more intelligent about tracking down tax evaders. The government is actively paying attention to this problem and released an official warning to not try and evade crypto taxes. Don’t be the person who goes to jail for committing tax fraud.

I accidentally did not properly report my tax for cryptocurrency for historical tax years. What should I do?

Speak with your tax professional. The IRS has also issued guidance on amending your tax return for a previous year.

This is ridiculous!

Sorry, we don’t make the rules! Feel free to contact your representative to let them know how you feel.

Do you report my capital gains to the government?

No. We are not a tax preparation service. We simply offer informational tools to help you figure out your own crypto taxes. Note: we do comply with all federal and state laws & regulations as outlined in our Privacy Policy and Terms of Service.

Where can I get more information about cryptocurrency taxes?

Please speak with your tax professional. In addition, here are some great resources to examine:

How does cryptocurrency taxation work in Canada?

As with everything above you should speak with a local tax professional. The Canadian Revenue Agency (CRA) has issued guidance that virtual currencies are taxed like barter transactions, similar to the rules in the USA.

They also specify that virtual currencies can be traded like commodities, where any resulting gains or losses could be considered taxable income or capital. You can read about their bulletin (paragraphs 9 - 32) or see this guide to determine which applies to you. The difference is that business income is included in taxable income at 100%, whereas capital gains are included in taxable income at 50%.

In terms of capital gains calculations, the CRA requires using Adjusted Cost Base (ACB). Your capital gains go onto your Schedule 3 Form. See here for an explanation of how ACB works.

Additionally, when you hold specified foreign property greater than CAD 100,000 in value during any time during the year, you are required to fill out a T1135 – Foreign Income Verification Statement.

To learn more, see these articles:

Feedback

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I am unsatisfied with the service. How can I get a refund?

If you would like a refund, please email your purchase receipt to feedback@cointracker.io with your request and reason for refund. Unfortunately refunds are not possible once you have downloaded any of the tax forms or CSV files (including Transaction History CSV).

I love CoinTracker and would like to help support its development. Can I make a donation?

We love to hear that. Our best compliment is for you to spread the word about CoinTracker. If you'd like to make a monetary contribution, our wallet addresses are:

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I still have a question, what should I do?

Email us at feedback@cointracker.io.