Crypto exchange taxes and the trouble with exchange shutdowns
2019 thus far has been rough for exchanges. Cryptopia and QuadrigaCX have unexpectedly shut down. What if you didn't have a copy saved of your transaction history from these exchanges? Collecting your transaction data from exchanges is vital in calculating and reporting your cryptocurrency taxes.
If you’re missing data and can’t retrieve it, our team can help.
At TokenTax, we help our VIP clients with special situations like missing transaction data. In the case that a client needs to report crypto trades from a shutdown exchange and they don’t have a saved copy of their history, we will construct for them synthetic trades that reflect their transaction history.
Synthetic trades? That may sound suspicious, but there's no need to worry. We take the safe route. Our team will look up the prices of crypto that you have traded and use the most conservative prices to fill in your transaction history.
For example, if you know you bought BTC in January 2017, we would input trades for that BTC as bought for $755.76, the lowest price for BTC that month. This will fill in the gaps for missing cost basis.
We work with any data you can produce, like fiat deposits and withdrawals into exchanges and crypto deposits and withdrawals to/from the offline exchange.
Crypto to crypto trades are much more complicated, but our experts can handle it. Again, we use the most conservative position, but with two crypto to fiat pairs as well as with the ratio between the crypto pair.
Because we use the lowest monthly price, you are safe even with missing data and synthetic trade data. If the IRS audits you, they will see that they actually likely owe you money because you’ve been as conservative as possible with cost basis — thus likely paying more tax. But paying more tax in the synthetic trade reports is still better than having to pay full gains on crypto with a missing cost basis of $0.
Questions? Ask our live chat support for more about our VIP plan, and how our accountants can fill in the gaps of your historical data.
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