Errors and warnings

Why is my crypto tax bill unrealistically high?

Last reviewed: August 15, 2026

A tax bill that is far too high almost never happens because FIFO “calculates wrongly”. It happens because sales are valued without cost basis, without a purchase, or with the wrong classification. Cost basis zero, a negative balance, a swap as a deposit or a transfer as a sale turn ordinary movements into full gains. Close the data first, then believe the number.

The facts in brief
Rarely	The tax rate
Usually	Cost basis 0, a missing buy or a wrong type
Holding period	Only with a provable purchase date

The three usual drivers

1) Cost basis zero. 2) A sale without an imported purchase. 3) An internal transfer or reward booked as a trade. Each of these lifts the gain, often by the entire proceeds. The tax rate is then only the multiplier on a wrong base.

How do you check the number in an hour?

Sort the largest disposal gains. If a purchase date is missing there or cost basis is zero, you have the hit. Next check unmatched outflows and unclear smart contracts. In chain.report those are the three CleanUp lists.

When is the high bill real?

When history, prices and classification are correct and you sold at a gain inside the holding period. Then the number is uncomfortable but explainable. That is what separates a reviewable report from a PDF you cannot defend.

Sources

Section 23 EStG — private disposals

Frequently asked questions

Does switching to LIFO fix a high tax bill?

Only if the method is legally available and the data is correct. On broken cost basis LIFO only produces a different wrong gain.

Can the holding period reduce the tax to zero?

Yes, for private disposals after one year in Germany. But only if the lot has a provable purchase date. Cost basis zero without a date does not save the period.

Is this the same problem as in CoinTracking or Blockpit?

Yes. Different names, same cause: incomplete or misclassified data. chain.report is built for exactly that moment.