Calculating cost basis for cryptocurrency is complicated. Manually tracking it can be insanely complicated and time consuming. To help you get it right, the American Institute of Certified Public Accountants (AICPA) recommends working with established blockchain companies and experts to help resolve your clients’ cryptocurrency tax issues.
At NODE40 we’ve spent the last three years solving this problem for our clients and this support document will show you how easy it is to use our platform. The following information contains real cryptocurrency transaction data that you can use to test out our system. If you have any questions, don’t hesitate to reach out to firstname.lastname@example.org or use the chat widget on this page. We are here to help.
Here’s how to get started.
Create an account
If you don’t already have an account with NODE40, you can register for free here: https://www.node40.com/me/register?app=node40Balance. All you need to get started is an email address.
Once your account has been created, you can use the information in this support document to create some ledgers with real-world Bitcoin transactions.
Create a Bitcoin ledger
NODE40 Balance will read the transactions in your wallet or exchange account and produce a fiat-denominated ledger with details about gains and losses on each transaction. You can follow along with the screenshot below to learn how NODE40 Balance works.
To get started, click the button labeled Import transactions from a Digital Currency Wallet and create a ledger.
Select Generic Wallet for Wallet Type.
Enter the following Extended Public Key (xPub):
Enter a Ledger Name.
NODE40 Balance will find all of the transactions on the blockchain for this wallet and produce your ledger.
Once your ledger is created, there are a number of views and functionality you can work with.
The Summary tab will show you a high level overview of the activity for a given wallet. By filtering for a specific time period, you will see the total Income received and any gains or losses as a result of disposition (e.g. outgoing transactions).
The Ledger tab is where you can view and modify transaction details. Simply click on a transaction to view the details.
The features above are all included in our free tier. The features outlined below are exclusive to our paid tiers.
Taxes & Forms
Every ledger will have corresponding tax forms and supporting documents. These documents can be handed over to your accountant for tax filing.
If you would like to see an example, you can download the documents for this example wallet here.
Most people have more than one wallet or have accounts on more than one exchange. That’s why we introduced Simple Multi-Account Reconciliation Technology (S.M.A.R.T). S.M.A.R.T will analyze multiple wallets for each cryptocurrency you own (e.g. Bitcoin) and reconcile the cost-basis as the cryptocurrency moves from one source to another.
Below is the S.M.A.R.T view for the example wallet (i.e. Wallet 1) above and an second wallet (i.e. Wallet 2). To get a sense of how valuable S.M.A.R.T is, you can create another ledger with the Wallet 2 xPub at the end of this document.
S.M.A.R.T has it’s own Taxes & Forms tab. If you would like to see an example, you can download the documents for the S.M.A.R.T view here.
Wallet 2 xPub
We are here to help
We understand that accounting for cryptocurrency transactions can be difficult to wrap your head around. If you have questions, or need any assistance, don’t hesitate to reach out to email@example.com or use the chat widget on this page, or talk to a support engineer by calling +1 (518) 730-4843.