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I have crypto losses though a non-US exchange and its nearly impossible to get clear cost basis documentation

I can fairly accurately calculate overall cost basis, but not each transaction.
Will I end up with an audit nightmare?
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1 Reply
JohnB5677
Expert Alumni

I have crypto losses though a non-US exchange and its nearly impossible to get clear cost basis documentation

Possibly, but documentation is critical. 

  • I know the diversity of cryptocurrency, and finding some details may be difficult. 
  • The first step is that you claimed it on your tax return.
  • Now DOCUMENT IN WRITING the steps you went through to attempt to get the most accurate cost basis.  This means on the date you acquired it down to the minute.
  • If this information is not available, describe what you did.

Cryptocurrency is kind of the new kid in town, and the IRS watches it with a suspicious eye.  You would initially get a simple letter prior to any investigation.  You would need your explanation at that time.

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