What happens if you don't know the cost basis of your cryptocurrency investments?

1 answers

• Ross OddershedeSep 29, 2024 · a year ago
  When it comes to cryptocurrency investments, knowing the cost basis is key. Not only does it affect your tax liability, but it also impacts your overall financial planning. Without knowing the cost basis, you won't be able to accurately calculate your capital gains or losses when you sell or exchange your cryptocurrencies. This can result in incorrect tax reporting and potential legal issues. Additionally, not knowing the cost basis makes it challenging to track your investment performance and make informed decisions about buying or selling cryptocurrencies. To avoid these problems, it's crucial to keep detailed records of your cryptocurrency transactions, including the purchase price, date, and any associated fees. If you're unsure about your cost basis, consider consulting with a tax professional or using specialized software to help you accurately calculate and track your cryptocurrency investments.
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