Who This Is For

Anyone who buys, sells, or transfers cryptocurrency needs to keep detailed records. Whether for tax purposes, portfolio management, or simply understanding your activity, good record-keeping prevents headaches later. This guide explains what to track and provides a practical template.

Disclaimer: This is educational information about record-keeping practices, not tax or legal advice. Consult qualified professionals for your specific situation.

Why Record-Keeping Matters

Tax Compliance

In most jurisdictions, cryptocurrency transactions are taxable events:

Taxable events typically include:

• Selling crypto for fiat currency (USD, EUR, etc.)
• Trading one crypto for another
• Using crypto to purchase goods/services
• Receiving crypto as income
• Some jurisdictions: Transferring between your own wallets

To calculate taxes owed:

• Need to know cost basis (what you paid)
• Need to know sale proceeds (what you received)
• Need to track each taxable event
• Need dates for short-term vs. long-term determination

Without records, you can't accurately report taxes.

Avoiding Overpayment

Without proper records:

• Can't prove your cost basis
• May have to assume zero cost basis (entire sale is gain)
• Pay more taxes than actually owed
• Can't offset gains with losses

With good records:

• Accurately calculate gains and losses
• Offset gains with losses (tax-loss harvesting)
• Prove cost basis if audited
• Pay only what's owed

Exchange Failures

Exchanges can:

• Close down
• Get hacked
• Lose data
• Lock your account
• Disappear (exit scams)

If your only records were on exchange, you lose everything.

Your own records are your backup.

Portfolio Understanding

Good records help you understand:

• Total invested amount
• Current gain/loss position
• Average cost basis
• Performance over time
• Where funds are located

This informs better decision-making.

Fraud Detection

Detailed records help you notice:

• Unauthorized transactions
• Exchange errors
• Missing deposits/withdrawals
• Account compromises

Early detection limits damage.

What to Track

For Every Transaction

Essential information:

1. Date and time (including timezone)
2. Transaction type (buy, sell, trade, transfer, income, etc.)
3. Amount of crypto (specific number and token)
4. Value in your local currency at time of transaction
5. Fees paid (in crypto and fiat)
6. Transaction ID (hash on blockchain)
7. Platform/exchange where transaction occurred
8. Wallet addresses (from and to)
9. Notes (context, purpose, any special circumstances)

For Purchases (Buying Crypto)

Track:

• Fiat amount spent
• Crypto amount received
• Exchange used
• Payment method
• Fees paid
• Date and time
• Transaction ID from exchange

Example:

• Date: 2026-02-05, 2:30 PM EST
• Type: Buy
• Bought: 0.01 BTC
• Cost: $400 USD
• Fee: $2 USD
• Exchange: Coinbase
• Payment: Bank transfer
• Transaction ID: abc123xyz

For Sales (Selling Crypto)

Track:

• Crypto amount sold
• Fiat amount received (after fees)
• Exchange used
• Destination account
• Fees paid
• Date and time
• Transaction ID
• Cost basis of sold crypto (from purchase records)

Example:

• Date: 2026-02-10, 4:15 PM EST
• Type: Sell
• Sold: 0.01 BTC
• Received: $425 USD
• Fee: $2.50 USD
• Exchange: Coinbase
• Cost basis: $400 (from 2026-02-05 purchase)
• Gain: $22.50
• Transaction ID: def456uvw

For Trades (Crypto-to-Crypto)

Important: In many jurisdictions, trading one crypto for another is taxable event (selling first crypto, buying second).

Track:

• Crypto sold (amount and type)
• Crypto received (amount and type)
• Market value of both at time of trade
• Platform used
• Fees paid (often in the crypto being sold)
• Date and time
• Transaction IDs

Example:

• Date: 2026-02-08, 10:00 AM EST
• Type: Trade
• Sold: 1 ETH (value: $2,500 USD)
• Received: 0.025 BTC (value: $2,500 USD)
• Fee: $10 USD worth of ETH
• Platform: Uniswap
• Transaction ID: ghi789rst
• Cost basis of ETH sold: $2,000
• Gain on ETH: $500

For Transfers (Between Your Wallets)

Not taxable but important to track:

• Crypto amount transferred
• From wallet address
• To wallet address
• Network fee paid
• Date and time
• Transaction ID
• Purpose/note ("Moving to cold storage")

Why track if not taxable: Proves you didn't sell it, helps maintain continuity in records.

Example:

• Date: 2026-02-06, 7:00 PM EST
• Type: Transfer
• Amount: 0.5 ETH
• From: Coinbase wallet
• To: Hardware wallet (address: 0x123...)
• Network fee: $5 USD worth of ETH
• Transaction ID: jkl012mno
• Note: Moving to cold storage

For Income (Receiving Crypto)

Taxable as income in most jurisdictions:

• Mining rewards
• Staking rewards
• Airdrops
• Payment for goods/services
• Interest/yield from DeFi
• Employer payments

Track:

• Crypto type and amount
• Fair market value at receipt
• Source/reason received
• Date and time
• Transaction ID
• Whether it's also subject to capital gains later

Example:

• Date: 2026-02-04, 9:00 AM EST
• Type: Income (staking reward)
• Received: 0.05 ETH
• Value at receipt: $125 USD
• Source: Coinbase staking
• Transaction ID: pqr345stu
• Note: Ordinary income, $125; also establishes cost basis for future sale

Record-Keeping Methods

Method 1: Spreadsheet (DIY)

Advantages:

• Free
• Full control
• Customizable
• Works offline
• No privacy concerns

Disadvantages:

• Manual entry (time-consuming)
• Prone to errors
• No automatic calculations
• No tax form generation

Best for: Small number of transactions, hands-on approach preference, learning purposes

Tools:

• Google Sheets (cloud-based, free)
• Microsoft Excel
• Apple Numbers
• LibreOffice Calc (free, offline)

Method 2: Crypto Tax Software

Advantages:

• Automatic import from exchanges
• Calculates gains/losses
• Generates tax forms
• Handles complex scenarios
• Regular updates for tax law changes

Disadvantages:

• Costs money (typically $50-300+/year depending on transactions)
• Privacy considerations (uploading transaction data)
• May not support all exchanges/wallets
• Learning curve

Best for: Many transactions, complex trading, multiple platforms, wanting automation

Popular options:

• CoinTracker
• Koinly
• CoinLedger (formerly CryptoTrader.Tax)
• TokenTax
• ZenLedger

Note: This isn't an endorsement of specific software. Research and choose based on your needs.

Method 3: Hybrid Approach

Combination:

• Use spreadsheet for basic tracking
• Use tax software when filing taxes
• Export exchange data to both

Advantages:

• Backup redundancy
• Lower cost (only pay for software when needed)
• Own records independent of software

Best for: Moderate transaction volume, cost-conscious, wanting backup

Method 4: Exchange Export + Storage

Minimum approach:

• Regularly export transaction history from exchanges
• Save as CSV/PDF
• Store multiple copies
• Supplement with spreadsheet for non-exchange activity

Advantages:

• Simple
• Low effort
• Free

Disadvantages:

• Doesn't calculate taxes
• Scattered across multiple files
• Not organized for easy review

Best for: Very simple activity, very few transactions, minimal trading

Spreadsheet Template

Here's a simple structure for tracking in spreadsheet:

Basic Transaction Log

Columns:

1. Date/Time
2. Type (Buy, Sell, Trade, Transfer, Income)
3. Exchange/Platform
4. Crypto Sent (Amount & Symbol)
5. Crypto Received (Amount & Symbol)
6. Fiat Amount (if applicable)
7. Fee (Amount & Currency)
8. Transaction ID/Hash
9. Wallet From
10. Wallet To
11. Notes

Example rows:

| Date | Type | Platform | Crypto Sent | Crypto Received | Fiat Amount | Fee | TX ID | From | To | Notes | |------|------|----------|-------------|-----------------|-------------|-----|-------|------|----|----| | 2026-02-05 14:30 | Buy | Coinbase | | 0.01 BTC | $400 USD | $2 USD | abc123 | Bank | Coinbase Wallet | Initial purchase | | 2026-02-06 19:00 | Transfer | On-chain | 0.01 BTC | 0.01 BTC | | $5 USD | jkl012 | Coinbase | Hardware Wallet | To cold storage | | 2026-02-08 10:00 | Trade | Uniswap | 1 ETH | 0.025 BTC | | $10 USD | ghi789 | MetaMask | MetaMask | Swapped ETH for BTC |

Cost Basis Tracker

For calculating gains/losses, track cost basis:

Columns:

1. Date Acquired
2. Crypto & Amount
3. Cost Basis (Total)
4. Cost Basis (Per Unit)
5. Date Sold (if applicable)
6. Sale Proceeds
7. Gain/Loss
8. Short/Long Term

Example:

| Date Acquired | Crypto | Cost Basis | Per Unit | Date Sold | Proceeds | Gain/Loss | Term | |--------------|--------|------------|----------|-----------|----------|-----------|------| | 2026-02-05 | 0.01 BTC | $402 | $40,200 | 2026-02-10 | $422.50 | $20.50 | Short | | 2026-02-08 | 0.025 BTC | $2,510 | $100,400 | | | | |

Portfolio Summary

Separate sheet tracking current holdings:

Columns:

1. Crypto Symbol
2. Total Amount Held
3. Average Cost Basis
4. Current Value
5. Unrealized Gain/Loss
6. Location (exchange, wallet)

Updates as you transact.

Example:

| Crypto | Amount | Avg Cost Basis | Current Value | Gain/Loss | Location | |--------|--------|----------------|---------------|-----------|----------| | BTC | 0.025 | $100,400/BTC | $101,000/BTC | +$15 | Hardware Wallet | | ETH | 5.5 | $2,200/ETH | $2,500/ETH | +$1,650 | MetaMask |

Download Template

You can create this structure in Google Sheets or Excel. Start simple, add columns as needed for your situation.

Essential columns for tax purposes:

• Date
• Type
• Amount
• Value at transaction time
• Fees
• Cost basis for sales

Best Practices

1. Record Immediately

Don't wait:

• Record transaction right after it happens
• While details are fresh
• Before you forget specifics

Waiting creates:

• Missing transactions
• Incorrect values
• Lost context

Set rule: No transaction without record.

2. Include Context

Notes field valuable for:

• Why transaction occurred
• Connection to other transactions
• Special circumstances
• Anything that provides context

Example: "Moved to hardware wallet for security" vs. just "transfer"

3. Save Transaction IDs

Always save TX ID/hash:

• Proves transaction occurred
• Can be looked up on blockchain explorer
• Useful if dispute with exchange
• Required for some tax situations

Find on:

• Exchange transaction history
• Wallet sent/received history
• Block explorer (etherscan.io, blockchain.com, etc.)

4. Track Fees Separately

Fees affect:

• Cost basis (increase basis when buying)
• Proceeds (decrease proceeds when selling)
• Tax calculations

Common fee locations:

• Exchange fees (trading fees)
• Network fees (gas, miner fees)
• Spread (difference between buy/sell price)

Track explicitly for accuracy.

5. Regular Reconciliation

Monthly or quarterly:

• Compare records to exchange history
• Verify balances match what you expect
• Look for missing transactions
• Check for unauthorized activity

Catches errors while fixable.

6. Multiple Backups

Store records in:

• Cloud storage (Google Drive, Dropbox)
• Local computer
• External hard drive
• Print important summaries

Test restoration periodically: Can you actually access backups?

7. Year-End Summary

Before tax season:

• Compile annual summary
• Calculate total gains/losses
• Organize by short-term and long-term
• Have records ready for accountant or software

Makes tax time much easier.

8. Keep Indefinitely

Tax authorities can audit years later:

• US: Typically 3 years, up to 6 years in some cases
• Some countries: longer
• Serious issues: indefinitely

Keep records at least 7 years, indefinitely is better.

Digital storage makes this easy.

Common Record-Keeping Mistakes

Mistake 1: Starting Late

Problem: Trying to reconstruct months or years of history

Why it's hard:

• Exchange history may be incomplete
• Market prices hard to find for past dates
• Forgotten transactions
• Closed accounts inaccessible

Solution: Start now, do best to reconstruct past.

Mistake 2: Only Tracking on Exchange

Problem: Relying on exchange as only record

Why it's risky:

• Exchange could close
• Account could be locked
• Data could be lost
• Export format may change

Solution: Export and store your own copies regularly.

Mistake 3: Not Tracking Transfers

Problem: Only recording buys and sells, not transfers between wallets

Why it matters:

• Looks like you sold when you didn't
• Can't track where funds are
• Breaks chain of custody

Solution: Record all movements, note they're transfers.

Mistake 4: Ignoring Small Transactions

Problem: "This $5 airdrop doesn't matter"

Why it might:

• Small amounts add up
• May be taxable income
• Creates incomplete records
• May complicate tracking

Solution: Record everything for complete picture.

Mistake 5: Not Tracking DeFi Activity

Problem: DeFi transactions (swaps, liquidity, staking) not recorded

Why it matters:

• All potentially taxable events
• Often most complex to reconstruct
• Multiple transactions in one interaction

Solution: Track all DeFi activity carefully, including internal transactions.

Mistake 6: Missing Fair Market Value

Problem: Recording amount but not USD value at time

Why it matters:

• Can't calculate cost basis
• Can't determine gains/losses
• May need for income reporting

Solution: Always record value in your local currency at transaction time.

Mistake 7: No Backups

Problem: Single copy of records

Why it's risky:

• Computer failure
• Accidental deletion
• Ransomware
• Lost access

Solution: Multiple backups in different locations.

Recreating Lost Records

If you need to recreate records:

Step 1: Gather What You Have

• Email confirmations from exchanges
• Bank/credit card statements (fiat deposits/withdrawals)
• Screenshots or transaction notifications
• Old exchange exports
• Blockchain transaction history (if you know addresses)

Step 2: Request Exchange History

• Contact each exchange used
• Request complete transaction history
• Export to CSV/PDF
• Some exchanges have data retention limits

Step 3: Use Blockchain Explorers

If you know wallet addresses:

• Enter address in relevant blockchain explorer
• See all transactions to/from that address
• Export history
• Note: Shows transactions, not always fiat values

Tools:

• Ethereum: etherscan.io
• Bitcoin: blockchain.com, blockchair.com
• Others: specific to blockchain

Step 4: Find Historical Prices

For transactions where you know date but not price:

• CoinMarketCap historical data
• CoinGecko historical charts
• Exchange APIs (if accessible)
• Tax software often has historical price databases

Step 5: Document Reconstruction

Keep notes:

• What records are confirmed vs. reconstructed
• Sources used
• Any uncertainties
• Assumptions made

Be prepared to explain methodology if audited.

Step 6: Going Forward

Once reconstructed, maintain records properly.

Consider: Professional help from crypto tax accountant for reconstruction if complex.

Key Takeaways

• Keep detailed records of every crypto transaction from day one
• Minimum: date, type, amounts, value, fees, transaction ID
• Use spreadsheet, tax software, or hybrid approach
• Store multiple backups in different locations
• Include transfers and non-taxable events for complete picture
• Record immediately, don't wait
• Export exchange history regularly
• Keep records indefinitely (at least 7 years)
• Start now if you haven't already

Good record-keeping is boring but critical. It's tax insurance, audit protection, and portfolio management foundation. Do it right from the start.

Disclaimer: This information is educational, not tax advice. Consult qualified tax professional for your specific situation and jurisdiction.

Further Reading

• Dollar-Cost Averaging Explained
• Risk Limits: Allocation Framework
• Fees and Transfers: Understanding Costs
• Safe Transaction Habits