As you accumulate assets over time, TaxBit creates a pool of "cost basis" that is available for disposing of based on the date they were acquired, and the USD value paid to acquire them. Depending on your accounting method, (FIFO or Specific ID, you can read more about those HERE) TaxBit’s tax engine will refer to the cost basis pool for the best available asset to fit your tax accounting method.
Example: You purchased 1 BTC for 2,000 and then another 1 BTC for 10,000. Your cost basis pool would contain 2 BTC in total, stored as two separate entires. The entries in the cost basis pool would be tied to both the transaction date and the USD value sent to acquire the assets.
- FAQ: How can the cost basis pool be leveraged before submitting a sale or a trade? Our Tax Optimizer can actually provide you with insight to what your gains or losses will be before you complete a trade. Read more about the Tax Optimizer in this help article (Coming Soon).
- What is Cost Basis?
- How is the cost basis used for tax purposes?
- How can I see the cost basis of my completed transactions?
Looking for more information? Reach out to our Support Team and we would be happy to help with any questions you may have.