73 lines
4.4 KiB
Markdown
73 lines
4.4 KiB
Markdown
## Cryptocurrency tax reporting
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(This is the README in the hledger repo's [examples/csv/cctax/][cctax] directory,
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also published as the [Cryptocurrency tax reporting] page on hledger.org.
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The information here was last updated in 2025-12.
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)
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<!-- This page can be viewed on github or hledger.org, so use absolute urls -->
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[Cryptocurrency tax reporting]: https://hledger.org/cctax.html
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[cctax]: https://github.com/simonmichael/hledger/tree/master/examples/csv/cctax
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In this directory we are not concerned with importing to hledger,
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but with exporting from hledger to cryptocurrency tax calculators.
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Why do this ?
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In most countries, the revenue and capital gain from receiving/selling/trading cryptocurrencies (cc) is taxable and must be reported.
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There are several aspects to this:
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- Calculating income. This is easy - at least, once you have recorded all transactions in hledger.
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- Calculating capital gains. This can be hard, and depends on your country's rules.
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- Calculating taxes owed. This also depends on your country's rules, and is often handled by specialised tax preparation software.
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Centralised exchanges will calculate gains for you, but self-custodied wallets, decentralised exchanges, or other defi apps won't;
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with those, you are responsible for calculating gains.
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In some countries, such as the USA, this requires:
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- tracking the acquisition date, cost, and wallet of every purchase/acquisition over your lifetime
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- tracking their movements/splits/merges
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- disposing (selling/spending) them in a required order, such as:
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- FIFO - first in first out
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- LIFO - last in first out
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- HIFO - highest cost first out
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- LOFO - lowest cost first out
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- SpecId - specific identification of lots
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- and thereby calculating the capital gains or losses.
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In the US, before 2025 universal cost tracking was used to determine the disposal order;
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this means you consider the acquisition costs/dates of all your holdings of an asset (cryptocurrency), across all wallets.
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From tax year 2025, per-wallet cost tracking is required, which means you apply the disposal order separately within each wallet.
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The "Safe Harbor" rule allows you to allocate pre-2025 lots to specific wallets (once), which could help optimise taxes in some cases.
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In the UK, it's easier: you use each asset's average cost across all wallets.
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There are several ways you could calculate gains. Eg, assuming the worst case (US taxes), you could:
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1. Calculate gains using only hledger,
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by keeping track of each lot and lot movement with subaccounts,
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and selecting the appropriate lots/costs in disposal transactions.
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This is intuitive and robust. But also tedious, and above a certain level of activity it becomes unmanageable.
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2. Calculate gains using the built-in lot tracking syntax of Ledger or Beancount. Beancount's is more robust.
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These may be too limited to calculate gains accurately, eg when there are inter-wallet transfers.
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There may be additional plugins which help.
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3. Online cryptocurrency tax calculators (Bitcoin.Tax, Cointracker, Coinledger, Koinly, Summ, TokenTax..)
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These let you upload transaction history from all of your cryptocurrency activities.
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Then they analyse this data, identify what happened (you may need to add configuration here), and provide gains reports.
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These apps are convenient and featureful, eg they may understand your country's tax rules; but they also add rather serious privacy risk.
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When they are hacked or infiltrated, potentially your entire past, present and future cryptocurrency activities can be analysed.
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4. Offline cryptocurrency tax calculators. These tend to be more private.
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- [rotki] - freemium, featureful, does not support US yet (wallet-based cost tracking, <https://github.com/rotki/rotki/issues/2438>)
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- [RP2] - does not support US yet (<https://github.com/eprbell/rp2/issues/135>)
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- [BittyTax] - UK and US variants (can do wallet-based cost tracking by using multiple configs)
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[rotki]: http://rotki.com
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[rp2]: https://github.com/eprbell/rp2
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[bittytax]: https://github.com/BittyTax/BittyTax
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The main focus in this directory is exporting to offline calculators.
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Examples of their CSV import format are collected here.
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Each record represents an event in a particular cryptocurrency "wallet" (on an exchange or on a blockchain).
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There are basic events like deposit, withdrawal, buy, sell, expense, income; and some more specialised event types.
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