Digital Asset Database Digital asset research & education
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Definition cost basis lotcost basisspecific identification

Tax Lot

A record of one specific purchase, its quantity, date, and cost, used to calculate gain or loss when that quantity is later disposed of.

Every acquisition creates a lot, and which lot is treated as sold changes the reported gain, so jurisdictions specify permitted identification methods such as first-in-first-out, specific identification, or average cost. Digital assets complicate this in specific ways: rewards from staking and airdropped tokens generally create new lots valued at the time of receipt, network fees may adjust basis or be deductible depending on the rules, swapping one token for another is typically a disposal of the first, and some jurisdictions now require basis to be tracked per wallet or per account rather than across an entire portfolio. Readers meet lots in exchange tax statements, in cost-basis software that reconstructs history across wallets, and in the gaps that appear when records are missing. Rules differ substantially by country, and this is a description of the concept rather than tax advice.

In practice

Someone who acquired the same asset on several dates has several lots, and the method used to identify which one was sold determines the gain reported on that sale.

The common misunderstanding

That moving assets between your own wallets is a taxable disposal, when a transfer between wallets you control generally is not, although it frequently breaks the basis records that tax software depends on.

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Related terms

Accounting Treatment of Digital Assets The rules deciding how a company records the digital assets it holds in its published financial…
Custody Risk The risk of losing access to digital assets because of how they are stored, whether by you or by a…
Wash Sale Selling something at a loss and buying it back almost immediately, which some tax systems treat as…
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Lessons that use it

How digital assets are carried on a balance sheet Institutional access and regulation

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