Bitcoin Forum

I just read an article about the crypto tax calculator. The author of the article helped his Australian friend to buy some cryptocurrencies, particularly Cardano and Ripple.  While some people live in one of a handful of jurisdictions where capital gains are not taxed, the others might have big difficulties by calculating their profits or losses from investment into cryptocurrencies.

The article looks at the difficulties in producing tax reports when trading in crypto:

**Challenge #1.** Work out what category of tax you fall into
**Challenge #2**. Gather all your trading records in one place
**Challenge #3.** Coin hopping

There are basically two ways of calculation. You can do it manually, by hand, this might be ok for a few trades, but if you are an active investor or trader this will require either a lot of time or a lot of money to hire an accountant. 

The second way is to use the crypto tax calculator (https://cointradeledger.com/blog/why-do-you-need-a-crypto-tax-calculator) for anything more than that. The article comes to the conclusion that this way is better if you want to be both tax compliant and ensure that you don't pay too much tax.

This is a good recommendation and will probably help a lot of people. There might be a third way. I am still a huge fan of Excel and use it to keep track of all my trades and current positions. In my excel sheet I just added an extra Tab for Tax calculation. It might be a lot of work for the first time to set up the file, but once you have done it for one position in your portfolio you can just copy it down for all other trades. It's also a great way to make an quick overview your profits and losses in specific time period.

Many don’t know how the tax works and how they can legally avoid paying huge taxes, and this one might be a big help even though the capital gains are not taxable on your area. Its good to have such system where you can easily compute the tax and look for alternatives, is this only available on Australia or the system can work on many jurisdiction?

this is available world wide

Different jurisdictions have different tax laws. They have different tax calculations, therefore. So it is a bit of a challenge to come up with such an app. As a matter of fact, even in a single country, it is possible that certain tax systems and policies may vary from one state to another. This makes things a lot more complicated than they may seem.

An automatic crypto tax calculator is very convenient. However, it seems it still needs to be reviewed and finalized by a professional to make sure the computation is right and accurate based on the updated tax laws both on the national and local levels.

Many countries do not have clear tax systems some consider it to be assets and therefore are subject to some income tax articles on assets, and many countries do not have legislation to not adopt cryptocurrencies.

USA, UK, Australia has clear tax laws from which the program can be adjusted to calculate taxes and avoid paying too much tax.

Does the program work for all countries and has the latest updates?

It may works if all countries have same jurisdiction or major laws about taxation. There are countries who restricted cryptocurrency and some wants some regulation to it. The crypto tax calculator is good and helpful for us yet we can't use it because we have varieties of treating the tax. Tax is helpful in a country specially right now wherein the government have few treasuries left because of pandemic. But for me, having a tax in cryptocurrency industry creates too much hassle for us. The best thing they can do is to regulate the exchanges in order to pay taxes on time.