calculating-crypto-taxes

# Calculating Crypto Taxes

## Overview

Calculate cryptocurrency tax obligations from transaction history. Supports multiple cost basis methods (FIFO, LIFO, HIFO), identifies taxable events (trades, staking, airdrops), and generates Form 8949 compatible reports.

**DISCLAIMER**: This tool provides informational calculations only, not tax advice. Consult a qualified tax professional for your specific situation.

## Prerequisites

Before using this skill, ensure you have:

- Transaction history exported as CSV from your exchanges (Coinbase, Binance, Kraken, etc.)
- Python 3.8+ installed
- Understanding of your tax jurisdiction's crypto rules

## Instructions

### Step 1: Prepare Transaction Data

Export your transaction history from each exchange as CSV. Supported formats:

| Exchange | Export Location |
|----------|-----------------|
| Coinbase | Reports → Tax documents → Transaction history CSV |
| Binance | Orders → Trade History → Export |
| Kraken | History → Export |
| Generic | See `{baseDir}/references/exchange_formats.md` for column mapping |

### Step 2: Run Basic Tax Calculation

Execute the tax calculator with your transaction file:

```bash
python {baseDir}/scripts/tax_calculator.py --transactions your_trades.csv --year 2025
```

This uses FIFO (IRS default) and outputs:
- Total capital gains/losses
- Short-term vs long-term breakdown
- Summary of taxable events

### Step 3: Choose Cost Basis Method

Compare different methods to understand tax implications:

```bash
python {baseDir}/scripts/tax_calculator.py --transactions trades.csv --compare-methods
```

Or specify a method:

| Method | Flag | Description |
|--------|------|-------------|
| FIFO | `--method fifo` | First In First Out (IRS default) |
| LIFO | `--method lifo` | Last In First Out |
| HIFO | `--method hifo` | Highest In First Out (minimize gains) |

### Step 4: Generate Tax Report

Create Form 8949 compatible CSV:

```bash
python {baseDir}/scripts/tax_calculator.py --transactions trades.cs