What is the difference between total proceeds and cost basis in the context of cryptocurrency?

3 answers

• Rowdy The kingJun 16, 2023 · 2 years ago
  Total proceeds and cost basis are two important concepts in the world of cryptocurrency. Total proceeds refer to the total amount of money you receive from selling your digital currencies. This includes the initial investment plus any profits you make. On the other hand, cost basis represents the total amount of money you initially invested in purchasing the cryptocurrencies. It includes the purchase price, transaction fees, and any other costs associated with the acquisition. The difference between total proceeds and cost basis is the profit or loss you have made from your cryptocurrency transactions.
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• Pouria AhmadiJun 18, 2024 · a year ago
  When it comes to cryptocurrency, total proceeds and cost basis are crucial for calculating your capital gains or losses. Capital gains are the profits you make from selling your digital currencies, while capital losses are the losses you incur. To determine your capital gains or losses, you subtract your cost basis from your total proceeds. If the result is positive, it means you have made a profit. If the result is negative, it means you have incurred a loss. Understanding the difference between total proceeds and cost basis is essential for accurately reporting your cryptocurrency transactions for tax purposes.
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• Andrew FlowersMay 15, 2021 · 4 years ago
  In the context of cryptocurrency, total proceeds and cost basis play a significant role in determining your financial gains or losses. Total proceeds represent the total amount of money you receive when you sell your digital assets, while cost basis represents the total amount of money you initially invested in acquiring those assets. The difference between total proceeds and cost basis is your net profit or loss. It's important to keep track of these figures to accurately assess your financial performance in the cryptocurrency market. At BYDFi, we provide tools and resources to help you calculate and monitor your total proceeds and cost basis for a better understanding of your cryptocurrency investments.
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