Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
The first part explained what each move is taxed on. This one answers the operational question: with which papers, with which numbers, and in which box. The cardinal rule: in crypto, whoever doesn't document in real time reconstructs blindly later — and blind reconstruction always overpays (unprovable cost = the whole price is gain) or overexposes.
Acquisition cost: your most valuable tax asset
Your tax is on the gain — and the gain depends on proving what it cost you. Without cost evidence, the authority can treat the entire price as gain: the same BTC sold for $1M can be taxed on $200,000 or on $1M depending on your papers. The discipline: (a) export and archive each exchange's transaction statements (full CSVs, not screenshots) at least quarterly — exchanges go bankrupt, close accounts and delete histories; (b) keep the on-ramp receipts (a SPEI transfer to the exchange = your purchase CEP, the Banxico payment receipt); (c) fix a consistent cost-allocation method (FIFO/specific identification) and stick to it — the law doesn't dictate one for crypto (the inventory methods and the share methods don't apply literally: a reasonable and consistent choice is the defensible position); changing it every year to suit yourself is what's indefensible; (d) in crypto→crypto, record the peso value of BOTH sides on the transaction date — it's your sale today and your cost tomorrow.
Where and how it's reported
The long-term holder reports realized gains as disposition of property (Chapter IV): a provisional payment on relevant transactions and the true-up on the annual return, with the gain-accumulation mechanics. The habitual trader is in business activity: monthly provisional payments on the profit from that activity. Staking and yield: taxable at their value when received. The holder/trader boundary has no magic number of transactions — habituality, infrastructure and speculative intent define it (judgment, not formula: moderate confidence; when in doubt, the characterization is chosen and documented, not left for an auditor to decide). And the forgotten reporting requirement: if you funded positions with family or third-party loans, the $600,000 rule of art. 90 applies exactly the same.
The three mistakes that manufacture problems
1. The on-ramp with no history: selling crypto and receiving a SPEI from an exchange (or worse, from a P2P individual) without having reported the gain is building your own discrepancy with a return receipt attached. 2. P2P with strangers: beyond the risk of receiving dirty money (which turns your account into a piece of someone else's investigation), it destroys your cost traceability. 3. The "friend's company" that invoices your gains: the fashionable scheme for "giving shape" to crypto profits is invoicing simulated transactions — 69-B with a digital flavor. The correct version of all this is boring and it works: a real-time file, a consistent method, an annual return that reconciles with your bank on-ramps, and planned realization on a tax calendar.
Years of trading across 4 exchanges and no file at all?
It's the typical case and it has a standard solution: reconstruction of the historical position (cost bases, realized gains by year), quantification of what was omitted if anything, strategic regularization (voluntary correction is still the best card), and the record-keeping system going forward so it never happens again. The sooner it's done, the less it costs — late-payment surcharges run at 2.07% monthly.
Frequently asked questions
Are the automatic reports from tracking apps (CoinTracker, Koinly) any good?
As a reconstruction and drafting tool, yes — as evidence, only alongside the primary source (exchange CSVs, bank CEPs). The report from a configurable app carries no official evidentiary weight; the exchange statement plus the bank trail comes close. Use the app to calculate and the file to prove.
I bought BTC in 2017 on an exchange that no longer exists — did I lose the cost basis?
Not necessarily: bank transfers from the time, confirmation emails, and on-chain traceability (the address that received and still holds the coins) reconstruct a defensible cost. You build it like any circumstantial evidence — weaker than a CSV, vastly better than nothing. Do it now, not when they ask.
Do I report my holdings even if I haven't sold anything?
There is no crypto 'holdings' box and no tax for holding; what's reportable are realized gains and income (staking, etc.). That said, if your wealth is substantial it pays to have your position internally documented and your historical on-ramps reconciled — the day you realize gains, the whole story has to add up.
And VAT — does selling crypto trigger it?
The disposition of these intangibles between private individuals does not, in practice, generate creditable VAT in the holder model (and legal-tender currencies are outside the tax base), but the question has technical edges that aren't fully settled for crypto business models (services, fees, NFTs — each with its own analysis). For the typical individual investor: the real issue is ISR, not VAT. Moderate confidence — specific business models require their own analysis.
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