Crypto Taxes Are Complex, Don’t Allow Them To Derail Your Portfolio
The post Crypto Taxes Are Complex, Don’t Allow Them To Derail Your Portfolio appeared on BitcoinEthereumNews.com. In today’s Crypto for Advisors, Bryan Courchesne from DAIM offers information on tax preparation for crypto trades. We are half a year away from tax season, there are numerous considerations to track in order to be tax-ready. Then, Saim Akif from Akif CPA breaks down the differences in tax treatment between crypto and equities/bonds in Ask a Professional. Crypto Taxes Are Complicated, Don’t Let Them Derail Your Portfolio As advisors concentrated on crypto, we recognize the special tax scenarios this asset class presents. For example, crypto is exempt from wash-sale rules, which allows more effective tax-loss harvesting. It also enables direct asset swaps, such as converting bitcoin (BTC) to ether (ETH) or ETH to Solana (SOL), without first selling into cash. These are just a few features that set crypto apart from traditional investments. However, perhaps the most important thing for investors to consider is the multitude of platforms they may use and how challenging it can be to track everything at tax time. Tracking your crypto taxes isn’t just a year-end chore; it’s a year-round challenge, especially if you’re active on multiple central exchanges (CEXs) or decentralized platforms (DEXs). Every trade, swap, airdrop, staking reward, or bridging event can be a taxable event. Centralized Exchange Trading When using CEXs like Coinbase, Binance, or Kraken, you may receive year-end tax summaries, but those are inconsistent or often incomplete across platforms. One major challenge is tracking your cost basis across exchanges. If you buy Amazon stock in a Fidelity account and transfer it to Schwab, your cost basis transfers seamlessly and updates with each new trade. At tax time, Schwab can generate an accurate 1099 showing your gains and losses. However, in crypto, if you transfer assets from Kraken to Coinbase, your cost basis…
