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 cryptocurrency payment, then we look up the fair market value of that coin at that time.

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). Read more about capital gains methods in the Tax section of the forum.

Hello, you also need to include associated fees paid as part of the cost basis calculation. This is a crucial step CoinTracker is NOT doing in the calculations. This has gains/loss repercussions.

A scenario:
– you bought $1,000 USD worth of BTC at the fair market price of $16,000 per 1 BTC
– you received 0.0625 BTC
– you were also charged a $10 USD transaction fee
– total dollar cost = $1,000 + $10 = $1,010 USD

Your cost basis for 0.0625 BTC is $1,010 USD

However most Exchanges (e.g. Coinbase Pro) from the user standpoint works this way instead.

– You put an order in for $1,000 USD for BTC
– The order gets filled with a transaction fee of $10
– what you ACTUALLY got is $990 worth of BTC which equals to 0.061875 BTC (using the fair market price of $16,000 per 1 BTC in the example above)
– total dollar cost = $990 + $10 = $1000

Your cost basis for 0.061875 BTC is $1000 USD

Is there a specific reason why you’re not including the commisions/fees into the calculations?