Hi there 👋
The tax system requires your entire transaction history from the very first transaction in your accounts to calculate your taxable gains.
To calculate the sum of capital gains or losses per year, we need to individually calculate the capital gains or losses of each taxable transaction made in that year. To calculate your capital gains or losses, we also need to identify the purchase cost of the cryptocurrencies sold, otherwise known as the Total Acquisition Price.
To calculate the purchase price, we need to track all your movements.
This allows us to understand what the purchase price was, the quantity and your balance at the time of the sale. Thus, we need to know all the buying and selling transactions made for each cryptocurrency sold.
For example, if you bought 1 Bitcoin in 2017, exchange it in 2020 for 50 ETH, and then resell the ETH in 2021, we need to know the purchase price in 2017 and track the exchange of BTC for ETH to calculate your taxable gain realized in 2021.
Thus, every year, to calculate the capital gain or loss of a year, all the transactions of your portfolio, since the very first one, are required.
Waltio pays a fee every year to read and analyze the data from previous trades, and has therefore adjusted our average price downward.
For your information, we have shared this complexity of tax compliance with parliamentary enthusiasts on the subject of cryptocurrencies.
If you have any other questions, do not hesitate to contact us via the chat just at the bottom right of your screen! 💬
The Waltio team