How to calculate tax on ETH gas fees

At the time of writing gas price is 180 Wei and to do a trade on Uniswap cost around $100 in ETH. This is a significant amount for most users, and adding this to your cost basis is an important part in minimizing your taxes. But in most circumstances you will also need to consider the capital gains realised on the ETH you are spending for gas. 

Example:

DateTradeCurrencyPriceQuantityGas (ETH)ETH Price
1st Jan 2017BuyETH302--
4th Oct 2020BuySUSHI2001--
6th Feb 2020SellSUSHI100010.11000
6th Feb 2020BuyDAI10001--

In the above example Satoshi sells $1,000 worth of SUSHI on Uniswap for DAI. To do this he pays $100 in gas using ETH. He originally bought his Sushi for $200, and his ETH for $30 each. Satoshi realised a profit of $800 by selling his sushi (1000 - 200), but he also had $100 worth of gas fees, so he overall realised gain is $700 (1000 - 200 - 100). However he originally bought ETH at $30, and at the time of the transaction ETH was worth $1000, so Satoshi needs to consider the gain in ETH. This would be calculated as $97 ((1000 - 30) * 0.1). As you can see there is a lot going on here.

Fortunately CryptoTaxCalculator is one of the few crypto tax softwares to carefully consider this scenario. All you need to do is import your Ethereum public wallet address into our app, and we will automatically categorise all these transactions and handle this calculations for you. All you need to do is sanity check the results and you are sorted.

All content in this article is general information only and does not constitute financial, tax or legal advice. It is not intended to be used by anyone for the purpose of financial advice, legal advice, tax advice, tax avoidance, promoting, marketing or recommending to any other party any matter addressed herein. For tax, financial or legal advice please consult your own professional.

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