Definition ∞ Cost basis realized represents the original purchase price of a digital asset that has subsequently been sold, thus converting an unrealized gain or loss into a realized one. This metric is fundamental for calculating capital gains or losses for tax purposes and understanding an investor’s actual profit or deficit from a completed transaction. It accounts for all expenses related to acquiring the asset, including trading fees. This figure is critical for accurate financial reporting in the digital asset space.
Context ∞ The concept of cost basis realized is a central point in cryptocurrency tax reporting and financial planning discussions. News articles frequently address its implications for investors navigating complex tax regulations across various jurisdictions. The precise calculation methods for this metric, such as FIFO or LIFO, are often debated among market participants and regulatory bodies, highlighting its importance in compliance. This impacts investor financial obligations.
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