Understanding Taxes and Fees in Crypto Trading

I've been digging around the internet and finding a lot of conflicting info about taxes. Got a couple of questions. 1. Can I deduct the fees for buying and selling coins, or just the buying fees? 2. How do I calculate fees if they take part of my coins instead of cash?

You can deduct both fees, but it’s not really a deduction in the usual sense. You handle it like this: 1. Add acquisition fees to the purchase price to find your cost basis. 2. Subtract selling fees from your sale price. 3. Then, capital gains is the difference between the amount from the sale and your cost basis.

What if I deposit money into an exchange and trade a bunch, ending up with more BTC than USD by year’s end? Do I have to count capital gains for each trade even if I’m holding mostly BTC now?

Appreciate the example you shared. Just need to verify my calculations for capital gains. Here’s my sheet: Price Amount Total Fee Fee Coin Buy: 0.1555 570.6 88.7283 0.5706 ADA Sell: 0.1591 570 90.6870 0.0907 USD

Yeah, you’re supposed to report gains or losses on every BTC to USD transaction. Even if you only hold BTC now, that just means past gains/losses are unrealized. Cost basis here is $88.7283. Amount received is $90.5963, so capital gain is $1.87. *This isn’t legal advice though.

So, just to clarify, with selling I just subtract to get the profit, right? And what if the coin I’m selling isn’t USD, like ADA?

Why didn’t they deduct the buying fee of 0.5706 from $88.7283 though?

That fee was taken from your ADA balance, not the USD amount. If you look, there’s a difference in the ADA you bought and what you sold. You actually purchased 570 ADA for $88.7283, so that’s your real cost basis. The fee is already included in your total price. Exchanges usually take fees in the currency you buy. So your cost basis is based on the USD spent.