A taxable event is a transaction or activity you’re required to pay taxes on. These events aren’t universal. A taxable event in one country might not be one in another. Typically, transactions involving the sale of commodities, investments, and other capital assets are all taxable. Purchasing digital currencies like Bitcoin or BNB with fiat currency is unlikely to be a taxable event. However, selling or trading your crypto is likely to be taxed.
A taxable event will leave you with capital gains (profit) or capital losses. If an asset you’re holding appreciates and you trade it at a profit, you’ve made capital gains. If you trade or sell that asset at a loss, you’ve incurred capital losses.
Again, whether capital gains are a taxable event depends on your local tax authority. You may be able to deduct capital losses from your capital gains to reduce your taxes. Your overall amount of tax depends largely on the sum of these together. To help calculate this, taxpayers should note the date, cost basis (purchase price), sale value, and fees associated with all trading transactions.