Troubleshooting Wrong Gains and Missing Cost Basis

Accurate crypto taxes require a fully reconciled transaction history. Here's how to handle issues with wrong gain or loss and missing cost basis.

Do your numbers look wrong? Don't panic: here's how to troubleshoot your data

Seeing huge gains? Absurd portfolio numbers? Don't worry. This just means that you likely have incomplete data. If our system can’t match sells to buys, then it will default to $0 cost basis, which can result in higher gains than expected. Likewise, if there are missing sells, your portfolio amounts can be higher than expected. 

In order to properly reconcile your crypto taxes, a full history of every transaction you’ve ever made is required. See below a list of common problems, some of which may apply to you.

Often what seems like a very incorrect gain or loss amount can be fixed by just adding a few important pieces of missing transaction history.

If you're missing large amounts of data, our accountants help users on the VIP plan to fill in the gaps as much as possible.

What to look out for when troubleshooting your transaction data

Missing exchange integration or failed import

Be sure that you’ve added an API connection or uploaded a CSV for every exchange you’ve ever traded on, for all years of your trading.

Also be sure that every API connection has synced properly and that none of your CSVs are still in review

Not all years of data have been uploaded

TokenTax needs all years of your data (barring certain cases where we use a closing report for your past years). 

Some exchanges only let you download CSV reports for monthly or yearly segments: be sure that you’ve included the entire date range of when you’re traded. CSVs vary per exchange; be sure that you follow our CSV instructions.

For API connections, be sure that the start date is set correctly, keeping in mind that transactions will only pull from after that date. Unless you have exchange history from another source like a CSV already input for past years, often the start date should be left as default. 

Missing ICO purchases

You need to manually enter any ICO purchases. It’s important to account for both the crypto spent on the ICO purchase as well as the tokens acquired. 

Missing OTC or cash purchases

Like with ICO transactions, you’ll need to manually enter OTC (over the counter) purchases as well, whether it’s with an OTC firm, a Bitcoin ATM transaction, or buying Bitcoin with cash (i.e. not on an exchange).

Missing transactions for gifts given or received

If you were given crypto, you will need to manually enter as such. Be sure to read our article on how crypto gifts work for taxes so that you add the transaction correctly. Likewise, if you’ve given crypto, be sure to manually enter a “gift” type transaction. 

Missing coins bought on someone else’s account

If someone bought crypto for you, be sure to include that transaction onto your account (but don’t upload their whole transaction history). You can do this by manually entering the trade. If they spent crypto to buy the asset bought for you, use the USD equivalent in the sell amount and sell currency instead.

Missing fork income transaction

Per the IRS crypto FAQ, crypto received in a hard fork is to be treated as ordinary income. You manually enter an income transaction for crypto acquired in a hard fork. 

Missing airdrop income

Similar to hard forks, the IRS crypto FAQ also clarifies that airdrops are to be treated as ordinary income. You manually enter an income transaction for crypto acquired in an airdrop.

Crypto mined or received as staking rewards

If you mined crypto or received it as staking rewards, you’ll need to account for that in our system. That way, you know the amount that you need to report as ordinary income, and proper cost basis will be established for the crypto received. 

Instant swaps made on exchanges or in wallets

If you made an instant swap through your Exodus wallet or through a service like Changelly, you should upload a CSV that reflects the trade. If there’s no way to export a CSV of your swaps, manually enter the swaps. 

If you made instant swaps on an exchange, then the swap should be reflected in the API or CSV that you import. However, smaller exchanges may not accurately report instant swaps along with the trade data, so you may need to manually enter the swap if you don’t see the data in your transactions

Lost or stolen coins not accounted for

If you lost coins for any reason, like an exchange shutdown, wallet hack, wrong address, etc, then you should manually enter the event with a lost or stolen type transaction. Otherwise, our system will assume that you still hold the coin, showing it in your portfolio and/or erroneously pairing it with sales. 

Missing lost or stolen transactions need to be in our system. It can make a major difference particularly if you bought crypto years ago at cheaper prices and lost it.

For example, you could have bought 10 BTC for a total of $1,000 in 2014, and then lost it in an exchange hack. If you don’t put a transaction in our system to represent that lost crypto, then our system may match the BTC, bought at $100 each, to sells of BTC in 2018/2019 where price per BTC was at times trading above $10,000. 

Margin trading not accounted for

If you did margin trading on an exchange like Kraken, Bitfinex, Poloniex, Liquid, or another exchange that allows for margin trading in addition to spot trading, then your numbers may be off due to the data requiring custom work for it to reconcile with your account. Note that a VIP plan or custom add-on to premium is required for margin trading.

Simple contract trading exchanges like Bitmex, Deribit, and Bybit import into our system automatically, but other exchanges like the above may require manual work. Please contact our support via live chat or email at [email protected] in this case.

Rounding and fees

With more complex data spanning thousands of transactions, ultimately not every exchange reports fees, and some exchanges even round their numbers. This means that your portfolio may be slightly off, even if all of your data is correct.

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