Broken and misleading example in France tax guide
complete
N
Narrow Ant
Hi,
The way that crypto gains are taxed in France is very wrong.
While the formula is correct, the example is utterly broken.
- The total acquisition cost should include the acquisition cost of the whole portofolio.
- Once that is fixed, the actual cost basis is calculated at step 2. Gain is calculated at step 3. Step 4 is rubish.
To put it sanely :
When cashing 10% of your portofolio (2000€ sale price on a 20000€ total portofolio value), the cost basis is the same fraction of acquisition costs.
That is 10% of, let's say, 16000€. The cost basis is 1600€.
Then, the taxable gain is 400€ euros.
In order to be complete, the cost basis which was just taxed is to be deducted of subsequent operations.
Let's say that, the next day, 3000€ are cashed out.
The total acquisition costs would be now 14600€ (16000€-1600€).
The new portofolio value maybe dropped from 18000€ to 15000€.
The 3000€ sale price is 20% of total portofolio value.
The cost basis 20% of 14600€, 2920€.
The taxable gain is 80€.
I really hope that this is correctly implemented and that only the guide is broken.
Jack
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complete
Thanks for spotting this, I relayed the issue to our content team and we'll update the article soon.
The example in the article is wrong and this is not how Koinly's calculations work. We, of course, use the cost basis of the whole portfolio (proportionally to the value of the asset sold vs value of the whole portfolio)