Cost Basis. And transaction history (fiat → crypto → crypto → fiat)

[jomagu]

In the settings, if you’ve never ‘cashed out’ back to fiat and have ever only done crypto-to-crypto trades with your original fiat purchases, does this change the calculation somehow? The summary on the tax report page says “Koinly needs your full transaction history (fiat → crypto → crypto → fiat) in order to calculate your tax reports correctly.” In my case, I never did the crypto → fiat part.

I was under the impression the capital gains and taxes were tallied when selling back to fiat. I’m unclear how this and cost basis works – my cost basis is way higher than my purchases in crypto. If the market craters again like 2018/2019 could end up owing more in taxes than I’ve actually gained? Is that even possible?

Appreciate any input! Cheers!

[o99]

There’s probably some countries that don’t do this, but I think in most countries the trade of one crypto to another crypto is a taxable event. This will impact your gain/loss of the first crypto and your cost basis of the second.

Using crypto to buy goods/services may also be taxable events affecting your gain/loss.

So you can end up owing tax even if you haven’t converted back to Fiat.