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Adjusted Cost Base and Transaction Fees

I'm wondering how other forum members treat (in terms of tax calculations) the interact fees they pay in the course of funding their exchange accounts and the wallet fees they pay when moving the satoshis back and forth, prior to selling them for fiat currency.

It seems to me that these transaction losses will effectively reduce the "book value" of the bitcoin holdings and should be included in your Adjusted Cost Base (ACB) calculations, thereby reducing the capital gain upon selling.

Do other users on the forum take a different approach?

Comments

  • I've had such a painful experience just putting a sheet together that can handle ACB (multiple BTC-DOGE "arbitrage" trades between two exchanges with transaction times that don't line up, sigh) that I've just been ignoring them.

    In my latest incomplete attempt, I made sure to subtract them out from any figure for "current holdings" (each 2 DOGE transaction fee was "collecting" as part of my holdings). I created a column for trade fee and another for "costs" (in which I recorded the transaction fee), and then converted that to a fiat figure to subtract from the fair market value when calculating a gain. But it was so small in my case (2 DOGE, mostly), it was hardly worth the effort.

    Not sure what exchange you're using, but Coinsquare's reporting is horrible - fees seem built into the "price" that it stores, rather than the price you set for the order. If I had better source CSVs, I probably would have tried to get it right.

    Hope that helps!
  • RayonRayon Member
    edited March 2
    Hey @chrisyakimov, thanks for the input.

    I agree that it's a painful process to figure out how to track, on your ACB spreadsheet, the fees incurred for funding your exchange account with canadian dollars. It seems hardly worth it for the tiny increase in ACB (thus miniscule amount less of capital gains tax) when you're talking about the fractions of coins that constitute my holdings. But I figured that if I'm going to the trouble of setting up a spreadsheet to track my ACB, then I might as well build in all the functionality I might need in the years to come.

    I took another stab at my calculations last night, to limited success. What I found is that if I funded my exchange account with canadian dollars then used all the dollars to purchase crypto right away, there was no problem. I just divided up the Interac fee according to the dollar amounts I spent on each type of crypto and added that portion of the fee to the "book value" cost of each crypto.

    Where I ran into trouble was in an instance later on when I again funded my exchange account with canadian dollars using an Interac transfer. Then, instead of using up ALL the dollars on buys, I bought a bit of crypto, sold other crypto for dollars, sold other crypto for a different type of crypto, then sold some of that for canadian dollars and then later used the canadian dollars (some of it from the recent Interac funding, some of it from the sale of crypto) to purchase other crypto. After all that, trying to figure out to which crypto units I should attribute what portion of the Interac fees was next thing to impossible! :*

    Better to learn these lessons now, I guess. Going forward, I know that I'll either fully spend all CADs I fund to my account BEFORE I do any other sort of trades, OR I'll have to keep a separate spreadsheet to track when and where each funded dollar is spent. The alternative is to not include funding fees in my ABC calculations and lose out on a very tiny (at this point) reduction in tax.

    With regard to the trade fees, they seem a bit easier to track because it's pretty obvious which coin's ACB needs to be adjusted for any particular trade. I'm using Quadriga and the way they present the information about each trade in terms of prices and trade fees is pretty easy to follow. Still, this whole tax calculation aspect has been WAY more involved than I expected.
  • joedavolajoedavola Member
    edited March 10
    I've had such a painful experience just putting a sheet together that can handle ACB (multiple BTC-DOGE "arbitrage" trades between two exchanges with transaction times that don't line up, sigh) that I've just been ignoring them.

    In my latest incomplete attempt, I made sure to subtract them out from any figure for "current holdings" (each 2 DOGE transaction fee was "collecting" as part of my holdings). I created a column for trade fee and another for "costs" (in which I recorded the transaction fee), and then converted that to a fiat figure to subtract from the fair market value when calculating a gain. But it was so small in my case (2 DOGE, mostly), it was hardly worth the effort.

    Not sure what exchange you're using, but Coinsquare's reporting is horrible - fees seem built into the "price" that it stores, rather than the price you set for the order. If I had better source CSVs, I probably would have tried to get it right.

    Hope that helps!
    If you know the percentage of the funding fee why don't you just combine exchange trading fees + funding fee?

    EDIT: Nevermind, I get what your saying.
  • Thank you for sharing it's great
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