Can I change a cryptocurrency transaction to reflect transferring off an exchange to a different wallet, rather than it appearing as a sale?

Forum|Forum|4 years ago
February 3, 2022
6 replies
39 views

I have many cryptocurrency transactions from various exchanges like Coinbase, Binance.US, and Gemini. In these transactions I have purchased crypto assets and then often transferred them from the exchange to a different wallet storage location, but NOT sold them. When importing my transaction information into TurboTax from exchanges, it shows these transfers as sale events, however I technically did not sell it, I moved it to another location off-exchange. How do I reconcile this so it does not appear as a sale event?

TurboTax Premier Online

GeorgeM777

Level 11

If your cryptocurrency transactions were reported to you on a Form 1099-B, you might consider informing the firm that sent you the 1099-B to amend the relevant entries. However, as long as you are confident that the transactions at issue were not sales but rather transfers to a different wallet, then you can make the necessary adjustments to basis (cost) so that Form 8949 will show these transactions as having neither a gain nor a loss.

We assume that these transfers, which apparently have been reported as sales, show the transferred amount as if it was the proceeds from a sale of cryptocurrency. Assuming that is the case, adjusting your cost basis to equal the proceeds amount (the actual amount transferred to a different wallet) will at least not add to or substract from whatever tax liability you have.

In the Investment Income section is where you can make your edits to the cost basis as necessary.

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hessian19-gmail-Author

Level 2

Thank you for the great feedback! I will go in and either adjust these transactions' basis or simply just delete the event altogether. Fortunately, I track ALL of my transactions via my own spreadsheet, so I know exactly where everything went. I was just hoping it would be better integrated.

For future tax years, it would be beneficial if TurboTax creates the feature capability to simply "ignore" a transaction line item. This method would be much simpler.

Thanks again!