Fiat to Crypto Tax
Track cost basis when buying crypto with USD
Buying Crypto is NOT Taxable
Purchasing cryptocurrency with USD creates no tax liability. But tracking your cost basis now saves headaches later.
Purchase Details
No purchases added
Current Value (Optional)
Enter current price to see your unrealized gain/loss
Cost Basis Summary
Buying creates no tax liability. Save these records for when you sell.
Holding Period Breakdown
Add purchases to see holding periods
Fiat to Crypto FAQ
I bought $10K of BTC - do I owe tax?
No. Zero tax on the purchase. Your $10K becomes your cost basis. You'll only owe tax when you sell, trade, or spend it.
Should I use FIFO or LIFO?
Depends on your situation. FIFO (first in, first out) usually means selling oldest coins first. LIFO can minimize gains if prices rose.
Does Coinbase report my purchases?
Exchanges report to IRS via 1099s, but purchases alone don't create taxable events. They're reporting for sales/rewards.
I lost my purchase records - now what?
Check exchange history, bank statements, emails. Worst case: IRS may assume $0 basis, meaning 100% of sale is gain. Keep records!
Do I report on Form 8949?
Not for purchases. Form 8949 is for sales and dispositions. Purchases are just record-keeping for future use.
What if I bought with a credit card?
Same tax treatment. Source of USD doesn't matter. Your cost basis is what you paid (including any credit card fee).
Buying through PayPal or Venmo?
Same rules. Still not taxable. These platforms should provide purchase history for your records.
Does basis include wire transfer fees?
Exchange fees: yes. Bank wire fees: debatable. Most include all costs directly tied to acquiring the crypto.
When does my 1-year holding start?
Day after purchase. Buy on Jan 1, sell on Jan 2 next year = long-term (over 1 year). Sell on Jan 1 = short-term.
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