How to Calculate Cost Basis for NFTs

Farmer Harvey

Clarity beats precision. You don’t need perfect data; you need consistent rules. Cost basis is one of those rules. Get it roughly right, the same way every time, and your future self will thank you.

Here is the simple version. You paid something to acquire an NFT. You can add a few directly related costs. That total, measured in your tax currency, is your basis. Later you sell, you compute proceeds, you subtract, and the difference is your gain or loss. It is not glamorous. It is accounting.

The definition

Cost basis for an NFT is measured in your tax currency, for example USD. It is the fair market value of what you paid at the time of acquisition, plus direct costs to acquire such as gas and buyer paid fees. Basis is tracked per lot, per token ID. Your spreadsheet does not care how iconic the art is.

What to include in basis

USD value of the mint or purchase at the time you acquired it. Convert ETH or other crypto to USD using the price at that moment.
USD value of gas to mint or purchase at that time.
Buyer paid protocol or marketplace fees at acquisition, valued in USD at that time.

What not to include in basis: later listing fees, creator royalties on sale, or fees related to selling. Those reduce proceeds instead. Basis is about getting in, not getting out.

Common scenarios

Minted NFT: basis = mint price + mint gas.
Secondary purchase: basis = price paid + purchase gas + marketplace fee if buyer paid.
Airdrop claim: basis = 0 if truly free. Claim gas can be added to basis of the claimed NFT.
Bundle buys: allocate total cost across token IDs using floor price ratio, equal split, or a rule you consistently apply. The important part is picking a rule and sticking to it.

Tracking without pain

One wallet, one sheet. Token ID, tx hash, date, price paid, gas, total basis.
Use explorer links for every lot so you can prove it later.
Snap a CSV export each month. Do not rely on memory. Memories are bullish in bull markets and bearish in audits.

Selling later

When you sell, your gain or loss equals proceeds minus basis. It is subtraction.

Proceeds are measured in USD on the sale date after marketplace fees and royalties, minus gas to sell.
Gains and losses are recognized on the date of sale, in your tax currency.

A toy example

You purchase an NFT for 0.20 ETH when ETH is $3,000 and pay 0.01 ETH gas.
- Basis = 0.20 × $3,000 + 0.01 × $3,000 = $600 + $30 = $630.
You later sell for 0.15 ETH when ETH is $2,800 and pay 0.005 ETH in fees.
- Proceeds = 0.15 × $2,800 − 0.005 × $2,800 = $420 − $14 = $406.
Realized loss = $630 − $406 = $224. The math is not trying to trick you.

Imperfect data is normal

If you lost a tx hash or a marketplace changed its fee structure mid year, do not freeze. Write down a consistent, reasonable method and stick to it. Regulators reward consistency and documentation over heroics.

Why this matters

Basis is the ground you stand on when everything else moves. It turns chaos into arithmetic and lets you harvest losses or document gains without dread. It is not exciting but it lets you do exciting things later.

Start simple. Keep receipts. Evolve your system only when it breaks.