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
- Market value of 0.1 ETH at transfer: $30
Calculations:
- Original cost basis of 1 ETH: $1,000
- Gain on fee: $20 ($30 - $10)
- New cost basis of 1 ETH after transfer: $1,030 ($1,000 + $30 market value of fee).
Incurring 0.1 ETH as a gas fee results in a $20 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.
Example: Proceeds when selling Ethereum with a gas fee
Scenario: Sell 1 ETH for $1,000 and pay a $30 gas fee.
Proceeds calculation:
- Net proceeds from the sale: $970 ($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 and pay a 0.2 ETH gas fee from an existing lot of ETH.
Details:
- Cost basis of 0.2 ETH fee: $10
- Market value of 0.2 ETH at the time of the transaction: $60
Calculations:
- Original cost basis of 1 ETH: $1,000
- Gain on the 0.2 ETH used as a gas fee: $50 ($60 market value - $10 cost basis)
- New total cost basis after the transaction: $1,060 ($1,000 original + $60 market value of the fee).
Paying a 0.2 ETH gas fee results in a $50 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.
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.
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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
Disclaimer: This post is informational only and is not meant as tax advice. For tax advice please speak with a tax professional. See our full disclaimer.