You might have noticed that the proceeds from sales and acquisition costs can be a lot higher than your realized gain/loss and total portfolio value. This is perfectly normal, especially if you have done a lot of trading during the tax year.

The proceeds and acquisition cost are calculated each time you make a trade. The more frequently you trade - the higher the values become.

Let's say that you on January 1st bought 1 BTC worth $20,000. You then go on to make 50 trades of your entire portfolio value during the tax year from January 1st to December 31st. Assuming that your BTC value stays constant and that the price of BTC is $20,000 through the year for simplicity, your portfolio value will still be 1 BTC = $20,000 after doing 50 trades.

Both your proceeds and acquisition costs will now be approximately $1,000,000 even though your net capital gain is zero. The proceeds and acquisition cost can therefore be considered a measurement of your trading volume.

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