Cost Basis
TAXDEFINITION
What you paid to acquire a specific bitcoin lot, including fees — the number subtracted from sale price to calculate your taxable gain or loss.
Every purchase creates its own lot with its own cost basis: price paid plus any fees, denominated in dollars at the time of the buy. Buy on five different days and you have five lots, each with a different basis — which matters enormously when you only sell part of your stack.
Coins you didn't buy still get a basis. Mined bitcoin, staking rewards, and airdrops are taxed as ordinary income when received, and that same dollar value becomes their cost basis going forward — so a second tax event only happens if the price moves before you dispose of them.
IN A SENTENCE
“His cost basis was $30,000 per coin, so selling at $109,000 triggered a large capital gain.”
Key facts
Common questions
Do network and exchange fees count?
Yes — fees paid to acquire the bitcoin add to your basis; fees paid to dispose of it reduce your proceeds. Either way they lower your taxable gain.
What if I lost my purchase records?
Reconstruct from exchange statements or blockchain explorers where possible. Absent any record, the IRS can treat your basis as zero — worth avoiding by exporting CSVs yearly.