Fees impact the cost basis and proceeds of your crypto transactions, influencing the calculation of capital gains or losses.
Fees are treated as asset disposals, making them taxable events. These can result in a gain or loss, which CoinTracker includes in your tax calculations. Learn more about how trading fees vary across exchanges in our crypto-exchange fee comparison guide.
Examples of fee calculations
Example: Transferring Ethereum with a gas fee
- Scenario: You transfer 1 ETH and incur a 0.1 ETH gas fee.
- Details:
- Cost basis of 0.1 ETH fee: $10 USD
- Market value of 0.1 ETH at transfer: $30 USD
- Calculations:
- Original cost basis of 1 ETH: $1,000 USD
- Gain on fee: $20 USD ($30 - $10)
- New cost basis of 1 ETH after transfer: $1,030 USD ($1,000 + $30 market value of fee).
Incurring 0.1 ETH as a gas fee results in a $20 USD gain (due to the difference between its market value and original cost basis), and increases the cost basis of your remaining 1 ETH to $1,030 USD.
Example: Proceeds when selling Ethereum with a gas fee
- Scenario: Sell 1 ETH for $1,000 USD and pay a $30 USD gas fee.
- Proceeds calculation:
- Net proceeds from the sale: $970 USD ($1,000 sale price - $30 gas fee).
Example: Buying Ethereum with a gas fee paid from existing holdings
- Scenario: Purchase 1 ETH for $1,000 USD and pay a 0.2 ETH gas fee from an existing lot of ETH.
- Details:
- Cost basis of 0.2 ETH fee: $10 USD
- Market value of 0.2 ETH at the time of the transaction: $60 USD
- Calculations:
- Original cost basis of 1 ETH: $1,000 USD
- Gain on the 0.2 ETH used as a gas fee: $50 USD ($60 market value - $10 cost basis)
- New total cost basis after the transaction: $1,060 USD ($1,000 original + $60 market value of the fee).
Paying a 0.2 ETH gas fee results in a $50 USD gain (due to the difference between its market value and original cost basis), and increases the cost basis of your purchased 1 ETH to $1,060 USD.
Examples of how CoinTracker handles fees
Example: Fee in the same currency as the outgoing asset
- Details: When the fee is in the same currency as the outgoing asset, the total disposed amount is the sum of the outgoing amount and the fee.
- Calculation: Total USDC disposed = Outgoing amount (100 USDC) + Fee (1 USDC) = 101 USDC.
Example: Fee in the same currency as the incoming asset
- Details: When the fee is in the same currency as the incoming asset, the total amount received is the incoming amount minus the fee.
- Calculation: Total BTC received = Incoming amount (1 BTC) - Fee (0.001 BTC) = 0.999 BTC.
Example: Fee in a Different Currency from the Transacted Assets
- Details: When the fee is not in the same currency as either the outgoing or incoming asset (e.g., BNB used as a fee on Binance), the fee is treated as a separate disposal.
- Calculation: In an example where 1 BTC was sold for $1,700 USD with a 0.002 BNB transaction fee:
- Total BTC disposed: 1 BTC
- Total USD received: $1,700
- Total BNB disposed as a fee: 0.002 BNB
Why CoinTracker includes crypto fees in your cost basis
When you pay a transaction fee in cryptocurrency, CoinTracker includes the fee in the cost basis to prevent you from getting taxed twice.
Crypto fees are treated as a taxable event
When a fee is paid in crypto, that fee is treated as a disposal—similar to selling, spending, or exchanging crypto. This means you’re realizing a taxable event at the time the fee is paid.
If CoinTracker did not factor that fee into the cost basis, you’d be taxed twice: once when the fee is paid, and once when the asset is disposed of in the future.
Example: Paying transaction fees in LINK
If you transfer 1 LINK and pay the fee in LINK:
- The unit cost of 1 LINK is $5.93 USD
- The LINK fee is $0.83 USD at the time of payment
CoinTracker adds the fee to your cost basis:
- $5.93 (original cost of the asset)
- + $0.83 (value of the fee already taxed)
- = $6.76 USD total cost basis
By increasing the cost basis, this prevents you from being taxed twice on the fee amount, which has already been recognized as a taxable event. CoinTracker reduces your future capital gains or increase potential losses when the asset is later sold or transferred. This avoids double taxation and keeps your tax reporting accurate.
Disclaimer: CoinTracker is provided for informational purposes and is not intended as tax, audit, accounting, investment, financial, or legal advice. For financial, tax, or legal advice, please consult your own professional. See our full disclaimer.