How exchange fees affect your crypto cost basis
Exchange fees affect your crypto cost basis when they belong to a buy or a sale. Buy fees usually add to your basis; sell fees usually cut your proceeds.
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
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You will need the transaction history from every exchange you used. Sort each fee by the trade it belongs to, because that link decides how the fee is treated.
Which exchange fees affect cost basis?
Your cost basis is what you paid to acquire the crypto. A fee you pay to buy it usually adds to that figure. A fee you pay to sell usually reduces the sale proceeds. Only fees tied to a specific acquisition or disposal count.
How do I track fees step by step?
Work from the transaction history each exchange gives you. Keep buys and sales separate, because each fee follows one trade. For fees paid in crypto, note the asset and its value on the date you paid.
- 1Gather exchange recordsGet the year's history from every exchange you used. Look for fee lines and trade confirmations.
- 2Label each fee by tradeWrite the date, amount, asset, and the buy or sale the fee belongs to. Only fees tied to an acquisition or disposal count.
- 3Add buy fees to basisFor each purchase, add the fee to the price you paid. That total is your cost basis.
- 4Subtract sell fees from proceedsFor each sale, take the fee off the sale amount before you figure the gain or loss.
- 5Record transfer network feesMoving crypto between your own wallets is not taxable, but note the network fee, its date, amount, and asset.
What records should I keep afterward?
The IRS treats crypto as property, so you report capital gains when you sell it. Report those gains on your IRS return and keep the records behind each fee.
Frequently asked questions
Usually not, because sending crypto to your own wallet is a transfer, not a buy or a sale. Record the withdrawal fee anyway.
Paying a fee with crypto is a disposal, so you figure a gain or loss on that crypto for the year. The fee still belongs to the trade it paid for.
Keep one record for each transaction and label the exchange. Combine them when you prepare your return.
You add a buy fee to basis at the time of the buy. It affects your gain or loss when you later dispose of that crypto.
