If cryptocurrencies are traded, it can result in taxable profits and losses. For the correct determination of the actual tax liability, tax tools such as Blockpit usually rely on trusted price sources such as Coinmarketcap, Cryptompare, and other comparable sources. In order for a crypto asset and its weighted price history as well as market capitalization to be registered and accessible on the aforementioned platforms, certain requirements must first be met, such as listing on multiple exchanges. The lower the market capitalization and the younger or lesser-known a cryptocurrency is, the greater the likelihood that these requirements are not yet met. In such cases, there is usually no price data available tax tools can calculate with.
Blockpit allows all users to add missing price data for all assets and transactions. This feature is particularly practical for users who invest early in emerging cryptocurrencies. If price data is missing, this makes it difficult to determine acquisition or disposal costs and thus to calculate a correct crypto tax report for the corresponding tax year.
Where do I get my currency rate from if not from Coinmarketcap?
Price trackers such as Coinmarketcap calculate their currency rates by taking a volume-weighted average of all prices from different exchanges.
The purchase or sale price of your asset tranche is usually determined by tax tools on the basis of the per-unit price of a single asset (1 Bitcoin = 50,000 USD per unit). If no price source is available, this unit price or currency rate can now be entered in Blockpit directly on the transaction or on the asset in question.
Many exchanges provide the currency rates of your trades, rewards, etc. directly in your transaction history. If this is not the case, you may be able to look up the unit price or rate of your cryptocurrency via other price sources such as so-called blockchain explorers.
How can I set custom currency rates in Blockpit?
In the Blockpit Web App, missing currency rates of your crypto assets are made visible and can be corrected as shown in the following example sequence:
3. When calculating your tax report, the error “No fiat values for ASSET on DD.MM.YYYY” was detected. Click on the relevant ASSET to display all transactions affected by this error.
2. In addition, the error is visible in the extended detail view of these transactions.
3. Now the missing currency rate can be set by clicking on the affected incoming or outgoing asset quantity and selecting “ Add Fiat Value”.
4. When setting the currency rate, the price per asset should be entered according to the corresponding point in time. If no specific price data is available, the opening or closing prices of the corresponding day can also be used as well.
5. If the value is set, the error is fixed and the tax report can be recalculated. All acquisition and disposal costs of your crypto transactions can now be valued correctly and the tax report is available as a PDF download.
Tip: Blockpit enables the automatic recording of different transaction types from simple trade to incoming security token dividends. If a transaction type consists of an incoming and outgoing asset ( Trade: 1 ETH for 200 HNT) and if a currency rate is available for at least one of the two assets at time x, the missing currency rate or acquisition and disposal costs are derived automatically from the transaction counterpart.
If you want to try out our feature, you can always test our automatic exchange and wallet imports unlimited and free of charge.
Disclaimer: The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim either correctness or accuracy. For detailed information on crypto regulations, we recommend contacting a certified legal advisor in the respective country. If any questions occur, feel free to contact us on our social media channels.
Originally published at https://blog.blockpit.io on October 2, 2021.