The foundational report necessary for IRS regulatory compliance is the Gains/Loss report.
First off, what is Cost Basis and FIFO?
Cost basis is part of the calculation used to determine the amount of capital gain or loss when a digital asset is sold.
It’s the spot price of an asset at the time it is received.
Then, a capital gain or loss is triggered when the asset is spent, traded, exchanged, or swapped.
It’s crucial for tax purposes.
In Gilded, we track this using the tax lots, or record of the date, quantity, and spot price at time of purchase.
The holding period is traced by lot along with the cost basis. Each tax lot is unique and will be released on a FIFO methodology.
FIFO (First in, First out) is an asset-management and valuation strategy where assets produced or acquired first are sold, used or disposed of first.
How does it work?
You can create a FIFO Gain/Loss tax report with Gilded in 3 minutes. Here’s how to do it:
Click on Export in the top right corner on the Activity page, as shown below.
Click on the Exports tab.
Next, click “Gain/Loss Report” at the bottom of the screen to have your report delivered.
The report will be delivered shortly.
You can find it in the Reports tab.
This report is simple for you to create.
But the process Gilded uses in the background is not simple.
To properly calculate the report, Gilded accesses all your wallets, your purchase dates, your sale dates and all your transactions and then consolidates them into a report to optimize the detail and information necessary for your Gain/Loss report for tax purposes.
It's very complicated and, literally, almost impossible to do manually.
But for you, it's one simple click when you use Gilded.
