How to Calculate Capital Gains and Prepare Crypto Taxes

Gather raw data before you calculate anything

1. This how-to is educational, not tax advice—rules differ by country and change. Start by exporting CSVs from every CEX you used and listing self-custody addresses. Include DEX swaps, bridges, NFT trades, and transfers. Asset vocabulary: Understanding Cryptocurrencies, Tokens, and Altcoins.

2. Pull txids from block explorers where CSV gaps exist. Note timestamps in UTC and local time consistently. Missing fees distort gains. Explorer workflow: How to Read a Blockchain Explorer to Track Pending and Completed Transactions.

3. Identify accounts you forgot: old mobile wallets, FaucetPay withdrawals, airdrop claim addresses. Incomplete histories create under/over reporting risk. On-chain inventory skills: How to Analyze On-Chain Wallet Data and Metrics Using Tools like Dune or Etherscan.

Classify events and compute gains

4. Separate transfers (you still own the asset) from disposals (sell for fiat, crypto-to-crypto trade, spending). Many jurisdictions treat crypto-to-crypto as a taxable disposal—confirm locally. DEX trades from How to Use a Decentralized Exchange (DEX) to Swap Tokens are common disposals.

5. Establish cost basis for each lot (what you paid including fees). Apply your jurisdiction’s allowed method if specified (FIFO, specific identification, etc.). When you dispose, proceeds minus basis (and allowed costs) yield capital gain or loss. Tokenomics and supply events can affect valuation narratives but do not replace your lot accounting—see Understanding Crypto Tokenomics: Supply Caps, Inflation, and Token Burns.

6. Track income-like items separately when required: staking rewards, some airdrops, mining, referral bonuses. Fair-market value at receipt may matter. Staking context: How to Stake Tokens to Earn Network Rewards and What Crypto Staking Is and How Yield Is Generated.

7. Risk: “Tax loss” schemes that require giving a stranger custody of coins are often scams. Do not share seeds with anyone claiming to optimize taxes. Phishing variants: How to Identify and Avoid Common Crypto Phishing and Wallet Scams.

Reconcile, software, and filing posture

8. Use reputable crypto tax software if volume is high, but reconcile totals against your own exports. Software mislabels bridges and internal transfers—fix those rows manually. Bridge legs from How to Transfer Tokens Across Different Blockchains via a Cross-Chain Bridge are frequent mislabels.

9. Keep a folder per year: CSVs, explorer PDFs for large txs, notes on methodology. If you used partner tools like portfolio trackers, verify their prices on disposal dates. NFT sales need the same discipline as tokens (How to Mint, Buy, and Transfer an NFT Using a Decentralized Marketplace).

10. File according to local deadlines or hire a crypto-aware professional for complex DeFi. Going forward, log disposals weekly so next year is quieter. Lending interest and LP exits also create events—track them alongside How to Deposit Crypto Assets into DeFi Lending Platforms to Earn Interest and How to Provide Liquidity to an Automated Market Maker Pool.

11. Create a monthly ritual: export new exchange CSVs, append new self-custody txids, and tag each disposal with purpose (sell, spend, trade). Fifteen minutes a month beats a frantic year-end reconstruction. When DeFi complexity explodes, pause new strategies until records catch up—see Crypto Records for Taxes Without Panic.

11. Create a simple spreadsheet template once—date, asset, quantity, proceeds, basis, fees, txid, notes—and fill it the same week a disposal happens so year-end is reconciliation rather than archaeology. Include CEX withdrawals and DEX swaps in the same habit.