Coinfig can help you avoid overpaying crypto tax by bringing together the purchase records and qualifying losses that affect your gains. If those details are missing, your figures can make your profits look larger than they were.
You might remember the trade that made you money. But did you include what you originally paid for those coins? What about the investment you sold at a loss on another exchange? Here's why those records matter.
Start with what you paid
Imagine you bought crypto for R60,000 and later sold all of it for R90,000.
Ignoring fees, your gain is R30,000. If your records only show the sale, you're missing the R60,000 purchase that explains how much you actually made.
For crypto held as an investment on capital account, the qualifying cost of acquiring the asset forms part of its base cost. That's the amount compared with the sale proceeds to calculate the capital gain or loss. Certain directly related costs can also qualify. SARS explains base cost here.
That's why your original purchases matter, even if they happened years ago or on an exchange you no longer use.
Coinfig calculates gains and losses using FIFO, or first-in, first-out, which matches disposals to the oldest available acquisitions first. Bringing in your full history gives those calculations the records they need.
Your losses deserve attention too
It's tempting to focus on profitable trades when preparing for tax season. But qualifying losses matter.
Suppose you realised a R70,000 capital gain on one investment and an allowable R20,000 capital loss on another during the same tax year. Taken together, that's a R50,000 net capital gain before the annual exclusion and other applicable adjustments.
Leaving out the loss would overstate that figure. The R20,000 reduces your net capital gain, not your tax bill by R20,000.
Capital losses have specific rules. They cannot be deducted against ordinary income such as your salary, and unused assessed capital losses may be carried forward against future capital gains. See SARS's guidance on assessed capital losses.
This example assumes you sold the investment and the loss qualifies for tax purposes. A fall in the value of coins you still hold does not, by itself, create a realised capital loss.
Include the exchange you stopped using
Your main exchange might hold most of your activity today. An old account could still hold the purchase records needed to explain a sale this year.
Before relying on your figures, gather the history from every exchange and wallet you used. Include earlier years where those records explain assets you later disposed of.
In Coinfig, work through the records before you export your report:
- Import your history through supported exchange connections or CSV uploads.
- Review the completeness check for gaps in the data you've supplied.
- Use your original records to resolve missing history, then review your gains and losses before exporting your report.
The completeness check can help you identify gaps, but it cannot confirm that you've supplied every account. Include old exchanges and wallets even if you no longer use them.
Get the tax treatment right
In South Africa, crypto gains can fall under ordinary income tax or capital gains tax, depending on the facts. You need to apply the treatment that fits your activity. SARS sets out the general approach to crypto assets.
If you are unsure whether your activity amounts to trading or investing, take your Coinfig calculations and supporting records to a qualified tax practitioner.
Can Coinfig save you tax?
Coinfig can help you save tax when missing purchase costs or allowable losses would otherwise cause you to overstate your gains.
The benefit depends on your starting point. If your records and tax treatment are already correct, using Coinfig may leave the amount you owe unchanged. Complete records can also reveal gains or income you still need to declare.
Add your exchange and wallet history to Coinfig, check for missing purchases and losses, and review the calculations before preparing your return.
This article is general information, not tax advice. Coinfig provides calculations and supporting reports. It does not file your return or guarantee tax savings.