Calculating Your Crypto Income in New Zealand: FIFO, Records and the IRD

Calculating Your Crypto Income in New Zealand: FIFO, Records and the IRD

New Zealand has no general capital gains tax, but that does not make crypto tax-free. Profits from selling, swapping or spending cryptoassets acquired with the intention of disposal are taxed as income. The challenge for most people is not the rate, it is the calculation: working out your cost basis consistently and keeping the records the IRD expects. Here is how to get it right.

How crypto income is calculated

Your taxable income from a disposal is the NZD proceeds minus the NZD cost basis of the coins you disposed of. Because you typically buy crypto at many different prices, you need a method to decide which coins you sold and at what cost. Every value must be converted to New Zealand dollars using the exchange rate on the exact day of the transaction.

Choosing a cost basis method

The IRD accepts three approaches to working out cost basis. You should pick one and apply it consistently year to year.

Method	How it works	Best for
Specific identification	You track and identify the exact coins disposed of	Small numbers of clearly tracked holdings
First-in-first-out (FIFO)	The earliest coins you bought are treated as the first sold	Most investors with frequent trades
Weighted average cost (WAC)	Uses the average cost of a group of identical coins	High-volume traders in a single asset

Records the IRD expects

You must keep records for seven years. For each transaction, track the date, the type and amount of cryptoasset, the NZD value at the time, wallet addresses, and exchange data. Keep records of buys, sells, swaps and any rewards received. These records let you support your chosen cost basis method and reconstruct your income if the IRD asks.

Why accuracy matters from April 2026

From April 2026, crypto service providers must report user transaction data directly to the IRD under the OECD Crypto-Asset Reporting Framework (CARF). Exchanges will send your trading data to the government annually, so the IRD can compare it against your return. If your filed figures do not match, expect follow-up. Clean, consistent calculations matter more than ever. A tool like Summ applies your chosen cost basis method automatically and converts every transaction to NZD.

Frequently asked questions

Can I switch between FIFO and weighted average cost each year? You should apply your method consistently; changing it without good reason can raise questions from the IRD.

Is swapping one coin for another taxable? Yes, a crypto-to-crypto swap is a disposal and can produce taxable income.

Do I pay tax if I only hold and never sell? Simply holding is not a disposal, but rewards such as staking can still be income when received.

Once you choose a method and keep tidy records, calculating crypto income becomes routine. With Summ, your NZD values and cost basis are handled for you. Get started free and build your IRD-ready crypto report.

This article is general information only and is not tax advice.