The Token Expert Method

1. Selection of Tools and Data Import

We start by selecting the most suitable tools for your situation, then import the transactions associated with your addresses across different blockchains. We use several platforms, such as Octav and Koinly, to ensure a complete and accurate transaction history.

2. Identification of Transactions

We review all of your transactions to understand their context and categorize them correctly. Different types of transactions, such as swaps, transfers, and interactions with decentralized applications, are captured to ensure an accurate reconciliation of financial impacts.

3. Client Collaboration

For transactions that cannot be confidently classified, we reach out to confirm the details with you. This step ensures the accuracy and completeness of your transaction history.

4. Protocol-Based Impact Calculation and Reconciliation

We analyze your activity within each protocol to calculate relevant financial impacts, such as interest income, interest payments, and foreign exchange gains or losses. These impacts are then organized into a master data table.

5. Data Validation

Our team reviews the master transaction table to ensure consistency across all asset movements and to detect any anomalies, such as negative quantities in asset tracking.

6. Computing of gains and losses

Once the transactions are validated, we calculate gains and losses by transaction category using the accounting method appropriate to your tax jurisdiction.

7. Cost Basis Reconciliation

We reconstruct the year-end cost basis of your assets based on the initial cost and the cumulative impact of all transactions. This theoretical cost is then compared to the final cost per asset. Any discrepancies are thoroughly reviewed to understand their source and ensure the accuracy of your records.

8. Summary Preparation

We prepare a comprehensive annual summary of income, expenses, gains, and losses related to your digital assets. This document can serve as a starting point for your accountant during tax preparation.

9. Journal Entries (For Businesses)

For corporate clients, we also offer the preparation of journal entries related to digital assets. These entries can be produced monthly, quarterly, or annually, depending on your needs.

10. Tax Form Preparation (On Request)

For our clients in Canada, we can provide the necessary data to support the preparation of federal and provincial tax forms related to digital assets. Our reports are designed to facilitate the completion of all required tax filings.