Track Capital Gains and Investment Taxes

1. Realized vs Unrealized Gains — Why the Distinction Matters

Understanding the difference between realized and unrealized gains is the foundation of investment tax planning. An unrealized gain (or unrealized loss) is the increase (or decrease) in value of a position you still hold — it exists only on paper and has absolutely no tax consequence until you sell. A position can show a large unrealized gain of €50,000 and you owe zero tax as long as you do not sell. A realized gain is what occurs the moment you sell an asset at a price higher than your cost basis — this is the event that triggers a taxable transaction in most jurisdictions. DonkyCapital displays both types with complete clarity. Unrealized gains on open positions show your current potential tax exposure if you were to liquidate — useful for planning purposes. Realized gains show exactly what you have crystallized during the current tax year and will need to declare. The dashboard updates in real time as you import transactions: when you record a sale, DonkyCapital immediately reclassifies that position's gain from unrealized to realized and adds it to your year-to-date realized gain total. This live view prevents year-end surprises where investors discover they owe more tax than anticipated because they did not track their realized gains throughout the year. For investors in jurisdictions with different tax rates for short-term vs long-term gains, DonkyCapital also tracks the holding period for each position and classifies gains accordingly.

2. Tax-Loss Harvesting: Turning Losers Into Tax Savings

Tax-loss harvesting is one of the most powerful and underutilized tax strategies available to individual investors. The core principle is simple: if you have realized gains elsewhere in your portfolio during the year, you can intentionally sell positions currently sitting at a loss to "harvest" those losses and use them to offset your gains — reducing or eliminating your net capital gains tax liability for the year. For example, if you have realized €8,000 of capital gains from selling a well-performing position, and you also hold a position currently showing an unrealized loss of €3,000, you could sell that losing position to offset €3,000 of your gains, reducing your taxable capital gain to €5,000. The critical practical challenge of tax-loss harvesting is identifying suitable candidates quickly — especially as year-end approaches and you are simultaneously trying to evaluate dozens of open positions. DonkyCapital makes this straightforward: the unrealized loss view shows every position currently in negative territory, sorted by loss magnitude, alongside the current cost basis and the precise tax saving you would realize by selling. The wash-sale rule (in the US) prohibits repurchasing the same or substantially identical security within 30 days of selling at a loss — if you want to maintain exposure to that asset class, you need to buy a different but similar ETF or security during the 30-day window. DonkyCapital's position timeline helps you track these windows efficiently.

3. Cost Basis Methods: FIFO, LIFO, Average Cost, and Specific Identification

When you have built up a position through multiple purchases at different prices over time, and you sell only a portion of your shares, a fundamental question arises: which shares are considered sold? The answer to this question has a direct and sometimes dramatic effect on your taxable capital gain. FIFO (First In, First Out) assumes that the shares you bought first are the ones you sell first — creating a larger taxable gain in a rising market since older shares typically have a lower cost basis. LIFO (Last In, First Out) assumes the most recently purchased shares are sold first — resulting in a smaller gain or even a loss when recent purchases were made at higher prices. Average Cost uses the weighted average price of all your purchases, providing a consistent and simple approach. Specific Identification is the most tax-efficient method when you can select exactly which lot to sell: you manually specify which purchase lot is being sold to optimize for the tax outcome — for example, selling your highest-cost lot to minimize the taxable gain. DonkyCapital supports all major cost basis methods and shows you a side-by-side comparison of the gain/loss impact of each approach before you record a sale — allowing you to make an informed, tax-optimal decision at the time of the transaction rather than discovering the tax consequence later.

4. Tracking Capital Gains Across Multiple Brokers

The complexity of capital gains tracking multiplies significantly when you hold the same asset — or the same type of asset — across multiple brokers. Consider an investor who has built up a position in a global ETF over several years across DeGiro, Scalable Capital, and a retirement account at a third broker. Each broker tracks its own partial position with its own cost basis records, its own CSV export format, and its own transaction history. Without consolidated cross-broker tracking, you cannot calculate your true total cost basis for that ETF, cannot correctly identify which lot you are selling when you sell from one broker, and cannot accurately measure your total realized or unrealized gain for tax planning purposes. DonkyCapital consolidates all your positions and complete transaction histories from all imported brokers into a single unified capital gains view. The platform aggregates your cost basis across all lots regardless of which broker holds them, calculates your true total unrealized gain for every position, generates a year-to-date realized gain/loss report covering all brokers simultaneously, and shows you your effective tax exposure at the total portfolio level. This cross-broker capital gains report is one of the most time-saving features DonkyCapital offers for investors approaching tax season, eliminating the need to manually reconcile broker statements or run separate gain/loss calculations in spreadsheets.

5. How DonkyCapital Displays Gain/Loss Data

Effective capital gains tracking requires data presented at multiple levels of granularity simultaneously — and DonkyCapital's gain/loss dashboard is designed with this layered view in mind. At the position level, every open position shows: current market value, total cost basis, absolute unrealized gain or loss in your base currency, percentage unrealized return, and the holding period since the first purchase. At the asset class level, DonkyCapital aggregates unrealized gains by category (equities, bonds, REITs, etc.) so you can see which asset classes contribute most to your current tax exposure. At the broker level, you can see realized and unrealized gains broken down by broker account — useful when different brokers offer different tax reporting or withholding treatments. At the portfolio level, a summary dashboard shows total unrealized gain, total realized gain year-to-date, and the combined capital gains report for the full portfolio. You can toggle between absolute values and percentage returns, and filter by date range to see realized gains in any custom period. The realized gain/loss summary is updated immediately every time you import new transactions, meaning you can check your tax position at any point during the year rather than waiting for year-end broker statements.

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