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

3 answers

• May 02, 2022 · 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.
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• May 02, 2022 · 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.
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• May 02, 2022 · 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.
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