Cost Basis

The original value of an asset for tax purposes — typically what you paid for it in fiat-currency terms, plus any acquisition fees. When you sell or otherwise dispose of crypto, your taxable gain or loss is generally the difference between the disposal proceeds and the cost basis. Tracking cost basis accurately across many small acquisitions, swaps, airdrops, staking rewards, and DeFi interactions is the single most error-prone part of crypto tax reporting. Different jurisdictions allow different cost-basis methods (FIFO, HIFO, specific identification, average cost) with materially different outcomes.