Capital gains and losses on crypto-assets, according to French tax regulations, are calculated as the difference between the sale value and the acquisition value. Any fees paid to carry out the transaction are deductible from the capital gain.
However, the acquisition value does not correspond to the cost of the individual crypto-assets sold, but is determined according to specific criteria.
The method for calculating the acquisition price
To determine the acquisition price to use for calculating each individual sale, the PVCT method (Prix de Vente au Coût Total), meaning “Sale Price at Total Cost,” is applied.
The acquisition value is determined by multiplying the total acquisition cost of the entire portfolio by the ratio between the sale value and the total market value of the portfolio at the time of the sale.
In this way, the acquisition cost attributed to the crypto sold is proportional to the weight that sale has relative to the overall value of the portfolio.
⚠️The capital gain from a sale takes the entire portfolio into account
When you sell a crypto, not only the transactions involving that specific crypto are considered, but the whole portfolio is taken into account. This means you could sell a crypto at a lower price than you bought it for, but if the rest of your portfolio is in profit, you could still have an overall capital gain.
Total Acquisition Cost of Portfolio
The Total Acquisition Cost of Portfolio is the sum of the acquisition values of all the cryptocurrencies in the portfolio before the sale, regardless of the ticker of the crypto being sold.
Each time you buy a new crypto, this value increases by the amount you paid. Each time you sell a crypto, the value decreases by the portion of the acquisition cost attributed to that sale.
Portfolio Value
Portfolio Value refers to the total amount you would receive if you sold all the cryptocurrencies in your portfolio at that moment. Here too, just like with the Total Acquisition Cost, it doesn’t matter which crypto you are selling: all the cryptocurrencies in the portfolio are taken into account.
Calculation examples
Here is a practical example of how to calculate the capital gain or loss resulting from a series of purchases and sales.
Date | Type | Quantity and Asset | Transaction Value |
01 Jan | BUY | 4,00 ETH | € 4.000,00 |
05 July | BUY | 1,00 BTC | € 100.000,00 |
10 July | SELL | 4,00 ETH | € 12.000,00 |
31 Dec | SELL | 1,00 BTC | € 120.000,00 |
The first transaction, dated 01 January, is the purchase of 4,00 ETH at a value of € 1.000,00 each, for a total cost of € 4.000,00. The second transaction, dated 5 July, is the purchase of 1,00 BTC for a value of € 100.000,00.
First capital gain calculation
The third transaction, on July 10th, concerns the sale of 4 ETH.
To calculate the capital gain, the first step is to gather all the necessary data to apply the PVCT method.
Total Acquisition Cost of Portfolio
This value is obtained by adding up the acquisition costs of all the cryptocurrencies in the portfolio at the time of the sale: therefore, € 4.000,00 for the purchase of ETH and € 100.000,00 for BTC, for a total of € 104.000,00.
Total Portfolio Value
This value is calculated by adding up the market value of the cryptocurrencies in the portfolio at the time of the sale. The ETH has increased in value and is now worth a total of € 12.000,00, while the BTC has dropped to € 70.000,00. The total value of the portfolio is therefore € 82.000,00.
Calculation of the acquisition cost to be used for the sale (PVCT method)
Capital gain calculation
Although the ETH was purchased at a much lower price than the € 12,000.00 obtained from the sale, the tax cost takes the entire portfolio into account. As a result, this sale generates a capital loss.
Second capital gain calculation
The third transaction, dated 31 December, is the sale of 1,00 BTC.
Total Acquisition Cost of Portfolio
For the previous sale, we calculated a total portfolio acquisition cost of € 104,000.00. To obtain the correct value to use for the second sale, we need to subtract the acquisition cost already used in the previous sale, which is € 15,220.73:
Total Portfolio Value
This value is calculated by adding up the market value of the cryptocurrencies in the portfolio at the time of the sale. In this case, BTC has increased to a total value of € 120,000.00. Since there are no other cryptocurrencies in the portfolio, this is also the total value of the entire portfolio.
Calculation of the acquisition cost to be used for the sale (PVCT method)
Capital gain calculation
