On Friday, February 11, 2022 at 9:41:39 AM UTC-8, MZB wrote:
I have a variety of buy/sells (crypto) on an exchange and a wallet.
...
I need to render this information to gains/losses.
Is there some kind of software free or low cost that will do this as the exchange only reports transaction.
I'm not aware of anything free or low cost that does this, but I haven't tried doing
much of an on-line search.
It is possible that a commercial product like Quicken may have this capability.
It turns out that doing this correctly requires some care, so I don't think it would be straightforward to do this in a spreadsheet.
eg: bght .0278 BTC $ amt -- date
bght .0788 BTC $ amt--date
bght .001 BTC $ amt date
sld .003 btc etc
sld .0056 BTC etc.
How do I create gains/losses
The gain or loss is simply the difference between the money you receive from selling the asset minus your basis (essentially cost) in the asset. There are some
more details. See the reference at the end.
Part of the problem is that there is more than one way to determine basis.
The default method for most investments is FIFO (first-in, first-out), which means that the first items you buy are the first you sell. Another method is designated lots, where you identify the particular items you want to sell. This must be done at the time you place the sell order and ideally also be reflected in the trade confirmation. Assuming you didn't do that in your sales, you will need to use FIFO. [Mutual funds have a 3rd option, but it doesn't apply here]
You should start by taking a look at IRS pub 550:
https://www.irs.gov/publications/p550
Taking your example and using FIFO:
Your first purchase of .0278 BTC for $X
gives you a basis of X/278 for every .0001 BTC in that lot.
Your second purchase of .0788 BTC for $Y
gives you a basis of Y/788 for every .0001 BTC in that lot.
...
Your first sale of .003 for $Z means use sold .0030 BTC.
and your proceeds are Z/30 for every .0001 BTC
That uses up .0030 of your first lot of .0278 BTC
Your gain/loss on that sale is 30 * Z/30 = Z minus 30 * X/278 (basis from first purchase)
After this sale, your first lot is now .0248 (.0278 - 0.0030) BTC.
It still has a basis of X/278 for each .0001, but there are fewer of them.
Additional sales will keep using up the remaining .0248 BTC until it is all sold.
Then you start using the next .0788 from the second sale at its basis of Y/788 per 0.0001 BTC
You may end up splitting a sale across multiple purchase lots.
If this is too complicated for you to do alone, you should hire a professional.
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