Cost Basis (Average Cost Method)

In most jurisdictions, yes. The IRS in the US allows (and in some cases requires) capitalisable costs like broker commissions, exchange fees, and transfer costs to be added to the cost basis. Canada's CRA includes "outlays and expenses" such as commissions in the adjusted cost base. The UK's HMRC includes incidental costs of acquisition. In practice, if you paid a fee to acquire the asset — trading fee, gas fee, wire fee — it usually increases your ACB. If you paid a fee to sell, it usually reduces your proceeds rather than increasing your ACB. This calculator's TAI is the total you put in; you decide what to include.

In most jurisdictions — including the US, Canada, UK, and Australia — staking rewards and airdrops are taxable as ordinary income at their fair market value on the day you receive them. That same FMV becomes your cost basis for those units going forward. In practice this means: (1) you owe income tax on the value received, and (2) when you later sell, your gain is calculated from that FMV, not from zero. The way to record it in a ledger is to add a "buy" entry at the reward's FMV on the receipt date. Getting this wrong is by far the most common crypto tax error.

ACB (average cost basis) blends every purchase into one price and uses that for every sale — simple but you lose the ability to choose which lot to sell. FIFO (first in, first out) sells your oldest units first; this is the US default for stocks and crypto. LIFO (last in, first out) sells your newest units first; often reduces gains if you bought recently at higher prices. HIFO (highest in, first out) sells your most expensive units first; minimises gains but requires per-lot records. The method you use can change your tax bill by thousands of dollars, and switching methods mid-stream usually requires permission from the tax authority. Canada and the UK effectively require ACB for identical properties; the US allows specific identification for stocks and certain crypto holdings with proper records.

Under ACB, a sale does not change the average price per unit — it just reduces both TAI and TCH proportionally, leaving the ratio (and therefore the ACB) unchanged. Example: you hold 100 units at $100 ACB, so TAI = $10,000. You sell 40 units at $150. The cost removed from the pool is 40 × $100 = $4,000, so TAI becomes $6,000 and TCH becomes 60 units. ACB = 6,000 / 60 = $100 — unchanged. Your taxable gain is (150 − 100) × 40 = $2,000, and the remaining position continues at the same ACB. This is the defining property of the average cost method.

Moving an asset between your own wallets or exchange accounts is not a taxable event in most jurisdictions — you still own the same asset, just at a different address. Crucially, your cost basis does not change: the units keep the ACB they had before the transfer. However, the transfer fees (gas, network fees) may be added to the cost basis in some jurisdictions, or treated as a separate disposal in others — the rules are not fully settled. From an accounting standpoint, treat the move as an internal transfer: TAI and TCH stay the same, and the transfer fee is a small additional cost that may increase ACB. Do not record a transfer as a sell + buy, which is a common mistake that artificially resets the ACB.

In most jurisdictions — including the US, Canada, UK, Australia, and most of Europe — trading one crypto for another is a taxable disposal of the first asset and an acquisition of the second. You realise a gain or loss on the first asset based on its ACB and the FMV of what you received, and the second asset enters your pool at that same FMV on the trade date. Example: you swap 1 BTC with ACB $30,000 for 15 ETH worth $45,000. You realise a $15,000 gain on the BTC, and your ETH pool gains 15 units at $3,000 each ($45,000 TAI). This is different from moving coins between your own wallets, which is not taxable.